New Zealand markets closed
  • NZX 50

    12,724.29
    +5.38 (+0.04%)
     
  • NZD/USD

    0.6863
    +0.0041 (+0.60%)
     
  • ALL ORDS

    7,557.80
    -29.60 (-0.39%)
     
  • OIL

    68.18
    +2.00 (+3.02%)
     
  • GOLD

    1,778.10
    +4.50 (+0.25%)
     

Could The AbCellera Biologics Inc. (NASDAQ:ABCL) Ownership Structure Tell Us Something Useful?

·4-min read

The big shareholder groups in AbCellera Biologics Inc. (NASDAQ:ABCL) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

AbCellera Biologics is a pretty big company. It has a market capitalization of US$4.4b. Normally institutions would own a significant portion of a company this size. In the chart below, we can see that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about AbCellera Biologics.

View our latest analysis for AbCellera Biologics

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About AbCellera Biologics?

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.

As you can see, institutional investors have a fair amount of stake in AbCellera Biologics. 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 AbCellera Biologics, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
earnings-and-revenue-growth

Hedge funds don't have many shares in AbCellera Biologics. The company's CEO Carl Hansen is the largest shareholder with 20% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.7% and 7.6%, of the shares outstanding, respectively.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 AbCellera Biologics

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own a reasonable proportion of AbCellera Biologics Inc.. Insiders own US$1.2b worth of shares in the US$4.4b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public holds a 31% stake in AbCellera Biologics. 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 8.7%, private equity firms could influence the AbCellera Biologics board. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand AbCellera Biologics better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for AbCellera Biologics (of which 1 doesn't sit too well with us!) you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting