Orchestra BioMed Holdings, Inc.'s (NASDAQ:OBIO) market cap touched US$251m last week, benefiting both retail investors who own 41% as well as institutions
Key Insights
- Orchestra BioMed Holdings' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- 50% of the business is held by the top 11 shareholders
- Recent purchases by insiders
A look at the shareholders of Orchestra BioMed Holdings, Inc. (NASDAQ:OBIO) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 41% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Retail investors gained the most after market cap touched US$251m last week, while institutions who own 17% also benefitted.
Let's take a closer look to see what the different types of shareholders can tell us about Orchestra BioMed Holdings.
View our latest analysis for Orchestra BioMed Holdings
What Does The Institutional Ownership Tell Us About Orchestra BioMed Holdings?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in Orchestra BioMed Holdings. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Orchestra BioMed Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.
It would appear that 15% of Orchestra BioMed Holdings shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. RTW Investments, LP is currently the company's largest shareholder with 15% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 9.4%, of the shares outstanding, respectively. In addition, we found that David Hochman, the CEO has 0.8% of the shares allocated to their name.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Orchestra BioMed Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
We can report that insiders do own shares in Orchestra BioMed Holdings, Inc.. It has a market capitalization of just US$251m, and insiders have US$7.2m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Orchestra BioMed Holdings. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Equity Ownership
With an ownership of 14%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Public Company Ownership
It appears to us that public companies own 10% of Orchestra BioMed Holdings. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Orchestra BioMed Holdings better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Orchestra BioMed Holdings you should be aware of, and 1 of them is concerning.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.