Significantly high institutional ownership implies Kodiak Sciences' stock price is sensitive to their trading actions
52% of the business is held by the top 5 shareholders
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 Kodiak Sciences Inc. (NASDAQ:KOD), then you'll have to look at the makeup of its share registry. With 43% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Last week’s 15% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 228%.
In the chart below, we zoom in on the different ownership groups of Kodiak Sciences.
NasdaqGM:KOD Ownership Breakdown December 28th 2024
What Does The Institutional Ownership Tell Us About Kodiak Sciences?
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.
We can see that Kodiak Sciences does have institutional investors; and they hold a good portion of the company's stock. 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 Kodiak Sciences, (below). Of course, keep in mind that there are other factors to consider, too.
NasdaqGM:KOD Earnings and Revenue Growth December 28th 2024
It would appear that 33% of Kodiak Sciences shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. The company's largest shareholder is Baker Bros. Advisors LP, with ownership of 33%. With 7.5% and 5.0% of the shares outstanding respectively, BlackRock, Inc. and Victor Perlroth are the second and third largest shareholders. Victor Perlroth, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.
Our research also brought to light the fact that roughly 52% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.
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. 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 Kodiak Sciences
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.
We can see that insiders own shares in Kodiak Sciences Inc.. In their own names, insiders own US$32m worth of stock in the US$572m 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 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kodiak Sciences. 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.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Kodiak Sciences (of which 2 are concerning!) you should know about.
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.
