AFT Pharmaceuticals Limited (NZSE:AFT) insiders seem bullish, own 69% and have been buying more recently

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editorial-team@simplywallst.com (Simply Wall St)

Wed, Feb 19, 2025, 5:22 PM 4 min read

If you want to know who really controls AFT Pharmaceuticals Limited (NZSE:AFT), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 69% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

It's interesting to note that insiders have been buying shares recently. This could signal that stock prices could go up and insiders are here for it.

Let's delve deeper into each type of owner of AFT Pharmaceuticals, beginning with the chart below.

See our latest analysis for AFT Pharmaceuticals

ownership-breakdown — NZSE:AFT Ownership Breakdown February 20th 2025

What Does The Institutional Ownership Tell Us About AFT Pharmaceuticals?

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.

We can see that AFT Pharmaceuticals does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 AFT Pharmaceuticals' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth — NZSE:AFT Earnings and Revenue Growth February 20th 2025

We note that hedge funds don't have a meaningful investment in AFT Pharmaceuticals. Looking at our data, we can see that the largest shareholder is the CEO Hartley Atkinson with 69% of shares outstanding. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. For context, the second largest shareholder holds about 7.2% of the shares outstanding, followed by an ownership of 1.9% by the third-largest shareholder.

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 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 AFT Pharmaceuticals

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems that insiders own more than half the AFT Pharmaceuticals Limited stock. This gives them a lot of power. So they have a NZ$204m stake in this NZ$294m business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in AFT Pharmaceuticals. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.