The large shareholder groups of IsoPlexis Corporation (NASDAQ: ISO) have power over the company. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. I generally like to see some degree of insider ownership, even if it’s just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet.
IsoPlexis is a small company with a market cap of US $ 314 million, so it may still go under the radar of many institutional investors. Looking at our data on ownership groups (below), it looks like institutional investors have bought the company. Let’s take a closer look at what different types of shareholders can tell us about IsoPlexis.
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What does institutional ownership tell us about IsoPlexis?
Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
IsoPlexis already has institutions on the share register. Indeed, they hold a respectable stake in the company. This may indicate that the company has a certain degree of credibility in the investment community. However, it is better not to rely on the so-called validation that accompanies institutional investors. They too are sometimes wrong. It is not uncommon to see a sharp drop in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out IsoPlexis’ past income trajectory (below). Of course, keep in mind that there are other factors to consider as well.
It appears that hedge funds hold 16% of IsoPlexis shares. This is worth noting, as hedge funds are often quite active investors, who can try to influence management. Many want to see value creation (and a higher stock price) in the short to medium term. The company’s largest shareholder is Northpond Ventures, LLC, with a 23% stake. With 16% and 10% of shares outstanding, respectively, Spring Mountain Capital, LP and Perceptive Advisors LLC are the second and third largest shareholders. Additionally, we found that Sean Mackay, the CEO, owns 2.1% of the shares attributed to their name.
Looking further, we found that 55% of the shares are owned by the 4 largest shareholders. In other words, these shareholders have a say in the decisions of the company.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. There are a lot of analysts covering the stock, so you can look at expected growth quite easily.
Insider property of IsoPlexis
The definition of an insider may differ slightly from country to country, but board members still count. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
We can see that the insiders own shares in IsoPlexis Corporation. It has a market capitalization of only US $ 314 million and insiders have shares worth US $ 28 million in their own name. It’s good to see some investment from insiders, but it can be worth checking out if those insiders have bought.
General public property
The general public, including retail investors, own a 23% stake in the company and therefore cannot be easily ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.
Private equity firms hold a 40% stake in IsoPlexis. This suggests that they can influence key policy decisions. Sometimes we see private equity sticking around for the long haul, but generally they have a shorter investment horizon and – as the name suggests – don’t invest much in public companies. After a while, they may look to sell and redeploy their capital elsewhere.
Public enterprise ownership
Public companies currently own 5.1% of the shares of IsoPlexis. We cannot be sure, but it is quite possible that it is a strategic issue. Companies can be similar or work together.
While it is worth considering the different groups that own a business, there are other factors that are even more important. Take risks for example – IsoPlexis has 3 warning signs (and 1 which makes us a little uncomfortable) we think you should be aware of.
Ultimately the future is the most important. You can access this free analyst forecast report for the company.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.