Every investor in Vir Biotechnology, Inc. (NASDAQ:VIR) should be aware of the most powerful shareholder groups. We can see that institutions own the lion’s share in the company with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Institutional investors would appreciate the 15% increase in share prices last week, given their one-year returns have been disappointing at 39%.
In the chart below, we zoom in on the different ownership groups of Vir Biotechnology.
However if you’d rather see where the opportunities and risks are within VIR’s industry, you can check out our analysis on the US Biotechs industry.
What Does The Institutional Ownership Tell Us About Vir Biotechnology?
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.
We can see that Vir Biotechnology does have institutional investors; and they hold a good portion of the company’s stock. 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 Vir Biotechnology, (below). Of course, keep in mind that there are other factors to consider, too.
Vir Biotechnology is not owned by hedge funds. The company’s largest shareholder is SoftBank Investment Advisers (UK) Limited, with ownership of 17%. BlackRock, Inc. is the second largest shareholder owning 10% of common stock, and Arch Venture Partners, L.P. holds about 9.7% of the company stock. Additionally, the company’s CEO George Scangos directly holds 4.2% of the total shares outstanding.
We also observed that the top 6 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 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 Vir Biotechnology
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.
We can report that insiders do own shares in Vir Biotechnology, Inc.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$197m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public– including retail investors — own 11% stake in the company, and hence can’t easily be ignored. 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 Ownership
With an ownership of 26%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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.
Public Company Ownership
Public companies currently own 6.4% of Vir Biotechnology stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
Next Steps:
It’s always worth thinking about the different groups who own shares in a company. But to understand Vir Biotechnology better, we need to consider many other factors. For instance, we’ve identified 1 warning sign for Vir Biotechnology that you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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Originally published at Melbourne News Vine
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