To get a sense of who is truly in control of Nautilus Biotechnology, Inc. (NASDAQ:NAUT), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 33% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And looking at our data, we can see that insiders have bought shares recently. So the news of stock price falling by 18% is not something they might have been expecting soon after purchasing shares.
Let's take a closer look to see what the different types of shareholders can tell us about Nautilus Biotechnology.
Check out the opportunities and risks within the US Life Sciences industry.
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.
Nautilus Biotechnology already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Nautilus Biotechnology's historic earnings and revenue below, but keep in mind there's always more to the story.
Nautilus Biotechnology is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Nautilus Biotechnology's case, its Top Key Executive, Parag Mallick, is the largest shareholder, holding 17% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 14% of the stock. Interestingly, the third-largest shareholder, Sujal Patel is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
Our research also brought to light the fact that roughly 52% of the company is controlled by the top 4 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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
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.
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 most recent data indicates that insiders own a reasonable proportion of Nautilus Biotechnology, Inc.. Insiders own US$78m worth of shares in the US$238m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
The general public, who are usually individual investors, hold a 12% stake in Nautilus Biotechnology. 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.
Private equity firms hold a 27% stake in Nautilus Biotechnology. This suggests they can be influential in key policy decisions. 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.
We can see that Private Companies own 3.3%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Nautilus Biotechnology (including 2 which can't be ignored) .
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.
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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.
Find out whether Nautilus Biotechnology is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
