Significantly high institutional ownership implies CG Oncology's stock price is sensitive to their trading actions
The top 12 shareholders own 52% of the company
Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
If you want to know who really controls CG Oncology, Inc. (NASDAQ:CGON), then you'll have to look at the makeup of its share registry. With 45% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Unfortunately, institutional ended up on the other end of the spectrum as market cap fell by US$333m.
Let's take a closer look to see what the different types of shareholders can tell us about CG Oncology.
What Does The Institutional Ownership Tell Us About CG Oncology?
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.
CG Oncology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 CG Oncology, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in CG Oncology. Decheng Capital LLC is currently the largest shareholder, with 8.2% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.0% and 6.8%, of the shares outstanding, respectively. Hong Fang Song, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
After doing some more digging, we found that the top 12 have the combined ownership of 52% in the company, suggesting that no single shareholder has significant control over the company.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of CG Oncology
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.
We can see that insiders own shares in CG Oncology, Inc.. The insiders have a meaningful stake worth US$162m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public-- including retail investors -- own 21% 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
Private equity firms hold a 21% stake in CG Oncology. This suggests they can be influential in key policy decisions. 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.
Public Company Ownership
Public companies currently own 5.3% of CG Oncology stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand CG Oncology better, we need to consider many other factors. For instance, we've identified 3 warning signs for CG Oncology (1 shouldn't be ignored) that you should be aware of.
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.