Intellia Therapeutics, Inc.'s (NASDAQ:NTLA) latest 6.7% decline adds to one-year losses, institutional investors may consider drastic measures

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Key Insights

  • Significantly high institutional ownership implies Intellia Therapeutics' stock price is sensitive to their trading actions

  • 51% of the business is held by the top 10 shareholders

  • Insiders have sold recently

A look at the shareholders of Intellia Therapeutics, Inc. (NASDAQ:NTLA) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 87% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, institutional investors endured the highest losses last week after market cap fell by US$153m. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 45% for shareholders. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. Hence, if weakness in Intellia Therapeutics' share price continues, institutional investors may feel compelled to sell the stock, which might not be ideal for individual investors.

Let's take a closer look to see what the different types of shareholders can tell us about Intellia Therapeutics.

See our latest analysis for Intellia Therapeutics

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Intellia Therapeutics?

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.

Intellia Therapeutics already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Intellia Therapeutics' historic earnings and revenue below, but keep in mind there's always more to the story.

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

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Intellia Therapeutics. Looking at our data, we can see that the largest shareholder is ARK Investment Management LLC with 11% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.4% and 9.0%, of the shares outstanding, respectively. Additionally, the company's CEO John Leonard directly holds 0.8% of the total shares outstanding.