Institutional investors may adopt severe steps after Harvard Bioscience, Inc.'s (NASDAQ:HBIO) latest 13% drop adds to a year losses
In This Article:
Key Insights
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Significantly high institutional ownership implies Harvard Bioscience's stock price is sensitive to their trading actions
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A total of 10 investors have a majority stake in the company with 52% ownership
If you want to know who really controls Harvard Bioscience, Inc. (NASDAQ:HBIO), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 65% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And so it follows that institutional investors was the group most impacted after the company's market cap fell to US$123m last week after a 13% drop in the share price. The recent loss, which adds to a one-year loss of 34% for stockholders, may not sit well with this group of investors. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the downtrend continues, institutions may face pressures to sell Harvard Bioscience, which might have negative implications on individual investors.
Let's delve deeper into each type of owner of Harvard Bioscience, beginning with the chart below.
Check out our latest analysis for Harvard Bioscience
What Does The Institutional Ownership Tell Us About Harvard Bioscience?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Harvard Bioscience already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Harvard Bioscience's historic earnings and revenue below, but keep in mind there's always more to the story.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. It looks like hedge funds own 12% of Harvard Bioscience shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. 272 Capital LP is currently the company's largest shareholder with 6.5% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 6.5% of common stock, and Punch & Associates Investment Management, Inc. holds about 6.4% of the company stock. Furthermore, CEO James Green is the owner of 4.4% of the company's shares.