Institutions profited after Axcella Health Inc.'s (NASDAQ:AXLA) market cap rose US$35m last week butprivate equity firms profited the most
If you want to know who really controls Axcella Health Inc. (NASDAQ:AXLA), 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 44% to be precise, is private equity firms. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While private equity firms were the group that reaped the most benefits after last week’s 38% price gain, institutions also received a 21% cut.
In the chart below, we zoom in on the different ownership groups of Axcella Health.
Check out our latest analysis for Axcella Health
What Does The Institutional Ownership Tell Us About Axcella Health?
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 Axcella Health 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. 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 Axcella Health, (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 Axcella Health. Flagship Pioneering is currently the company's largest shareholder with 36% of shares outstanding. FMR LLC is the second largest shareholder owning 15% of common stock, and Nestlé S.A. holds about 14% of the company stock.
After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
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 Axcella Health
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.