Every investor in Aquestive Therapeutics, Inc. (NASDAQ:AQST) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Following a 26% increase in the stock price last week, retail investors profited the most, but institutions who own 41% stock also stood to gain from the increase.
In the chart below, we zoom in on the different ownership groups of Aquestive Therapeutics.
What Does The Institutional Ownership Tell Us About Aquestive Therapeutics?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Aquestive Therapeutics 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 Aquestive Therapeutics' historic earnings and revenue below, but keep in mind there's always more to the story.
earnings-and-revenue-growth
Hedge funds don't have many shares in Aquestive Therapeutics. Looking at our data, we can see that the largest shareholder is Bratton Capital Management, L.P. with 11% of shares outstanding. With 6.1% and 3.6% of the shares outstanding respectively, VR Adviser, LLC and The Vanguard Group, Inc. are the second and third largest shareholders. Additionally, the company's CEO Daniel Barber directly holds 1.5% of the total shares outstanding.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Aquestive Therapeutics
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Shareholders would probably be interested to learn that insiders own shares in Aquestive Therapeutics, Inc.. In their own names, insiders own US$21m worth of stock in the US$348m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 47% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Equity Ownership
With an ownership of 6.1%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Aquestive Therapeutics better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Aquestive Therapeutics (at least 2 which are significant) , and understanding them should be part of your investment process.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this freereport on analyst forecasts.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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