Key Insights
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Significant control over LTR Pharma by private companies implies that the general public has more power to influence management and governance-related decisions
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51% of the business is held by the top 9 shareholders
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Using data from company’s past performance alongside ownership research, one can better assess the future performance of a company
A look at the shareholders of LTR Pharma Limited (ASX:LTP) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Clearly, private companies benefitted the most after the company’s market cap rose by AU$60m last week.
Let’s delve deeper into each type of owner of LTR Pharma, beginning with the chart below.
See our latest analysis for LTR Pharma
What Does The Institutional Ownership Tell Us About LTR Pharma?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Less than 5% of LTR Pharma is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.
We note that hedge funds don’t have a meaningful investment in LTR Pharma. Looking at our data, we can see that the largest shareholder is LTR medical Pty Ltd with 33% of shares outstanding. Strategic Drug Solutions Inc is the second largest shareholder owning 4.3% of common stock, and Parkview Sc Bio Llc holds about 3.0% of the company stock.
We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of LTR Pharma
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.
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.
Our most recent data indicates that insiders own some shares in LTR Pharma Limited. It has a market capitalization of just AU$295m, and insiders have AU$23m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 37% stake in LTR Pharma. 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 Company Ownership
It seems that Private Companies own 45%, of the LTR Pharma stock. 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.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example – LTR Pharma has 2 warning signs we think you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
