To get a sense of who is truly in control of SAB Biotherapeutics, Inc. (NASDAQ:SABS), 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 40% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
As a result, individual investors were the biggest beneficiaries of last week's 844% gain.
In the chart below, we zoom in on the different ownership groups of SAB Biotherapeutics.
NasdaqCM:SABS Ownership Breakdown January 5th 2024
What Does The Institutional Ownership Tell Us About SAB Biotherapeutics?
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.
We can see that SAB Biotherapeutics does have institutional investors; and they hold a good portion of the company's stock. 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 SAB Biotherapeutics, (below). Of course, keep in mind that there are other factors to consider, too.
NasdaqCM:SABS Earnings and Revenue Growth January 5th 2024
Our data indicates that hedge funds own 27% of SAB Biotherapeutics. 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 RTW Investments, LP, with ownership of 9.9%. BVF Partners L.P. is the second largest shareholder owning 9.9% of common stock, and Commodore Capital LP holds about 7.5% of the company stock. Furthermore, CEO Eddie Sullivan is the owner of 5.7% of the company's shares.
On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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. 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 SAB Biotherapeutics
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our information suggests that insiders maintain a significant holding in SAB Biotherapeutics, Inc.. It has a market capitalization of just US$599m, and insiders have US$121m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SAB Biotherapeutics. 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.
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 example, we've discovered 5 warning signs for SAB Biotherapeutics (3 shouldn't be ignored!) that you should be aware of before investing here.
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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.