Institutions' substantial holdings in HilleVax implies that they have significant influence over the company's share price
A total of 5 investors have a majority stake in the company with 52% ownership
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
A look at the shareholders of HilleVax, Inc. (NASDAQ:HLVX) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 32% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's delve deeper into each type of owner of HilleVax, beginning with the chart below.
NasdaqGS:HLVX Ownership Breakdown September 23rd 2023
What Does The Institutional Ownership Tell Us About HilleVax?
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.
As you can see, institutional investors have a fair amount of stake in HilleVax. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 HilleVax, (below). Of course, keep in mind that there are other factors to consider, too.
NasdaqGS:HLVX Earnings and Revenue Growth September 23rd 2023
It looks like hedge funds own 7.4% of HilleVax shares. 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 Frazier Life Sciences Management, LP, with ownership of 22%. With 15% and 7.4% of the shares outstanding respectively, Takeda Pharmaceutical Company Limited and Deerfield Management Company, L.P. Series C are the second and third largest shareholders. Furthermore, CEO Robert Hershberg is the owner of 1.7% of the company's shares.
On looking further, we found that 52% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
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 HilleVax
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.
Shareholders would probably be interested to learn that insiders own shares in HilleVax, Inc.. In their own names, insiders own US$34m worth of stock in the US$591m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over HilleVax. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
With a stake of 22%, private equity firms could influence the HilleVax board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Public Company Ownership
It appears to us that public companies own 15% of HilleVax. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 4 warning signs for HilleVax (2 are potentially serious) that you should be aware of.
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.
