The considerable ownership by retail investors in AVITA Medical indicates that they collectively have a greater say in management and business strategy
43% of the business is held by the top 25 shareholders
Every investor in AVITA Medical, Inc. (NASDAQ:RCEL) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 46% of the company's stockholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.
Let's delve deeper into each type of owner of AVITA Medical, beginning with the chart below.
What Does The Institutional Ownership Tell Us About AVITA Medical?
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.
As you can see, institutional investors have a fair amount of stake in AVITA Medical. 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 AVITA Medical, (below). Of course, keep in mind that there are other factors to consider, too.
earnings-and-revenue-growth
We note that hedge funds don't have a meaningful investment in AVITA Medical. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 9.8% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 8.5% of common stock, and State Street Global Advisors, Inc. holds about 4.1% of the company stock.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 AVITA Medical
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 some shares in AVITA Medical, Inc.. As individuals, the insiders collectively own US$3.7m worth of the US$209m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 50% stake in AVITA Medical, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
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 2 warning signs for AVITA Medical that you should be aware of before investing here.
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.
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