The considerable ownership by individual investors in Contineum Therapeutics indicates that they collectively have a greater say in management and business strategy
A total of 13 investors have a majority stake in the company with 50% ownership
To get a sense of who is truly in control of Contineum Therapeutics, Inc. (NASDAQ:CTNM), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And institutions on the other hand have a 28% ownership in the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
In the chart below, we zoom in on the different ownership groups of Contineum Therapeutics.
NasdaqGS:CTNM Ownership Breakdown October 4th 2024
What Does The Institutional Ownership Tell Us About Contineum Therapeutics?
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.
Contineum Therapeutics already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Contineum Therapeutics, (below). Of course, keep in mind that there are other factors to consider, too.
NasdaqGS:CTNM Earnings and Revenue Growth October 4th 2024
Our data indicates that hedge funds own 16% of Contineum Therapeutics. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Suvretta Capital Management, LLC is currently the company's largest shareholder with 8.0% of shares outstanding. With 8.0% and 7.7% of the shares outstanding respectively, Baker Bros. Advisors LP and Johnson & Johnson Innovation - JJDC, Inc. are the second and third largest shareholders.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 13 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Contineum Therapeutics
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
We can report that insiders do own shares in Contineum Therapeutics, Inc.. As individuals, the insiders collectively own US$7.1m worth of the US$458m company. 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 Contineum Therapeutics. 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 might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Contineum Therapeutics you should be aware of, and 2 of them don't sit too well with us.
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.
