What You Need To Know About Menlo Therapeutics Inc.'s (NASDAQ:MNLO) Investor Composition
NASDAQ:MNLO) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.” data-reactid=”28″>A look at the shareholders of Menlo Therapeutics Inc. (NASDAQ:MNLO) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.
Menlo Therapeutics is not a large company by global standards. It has a market capitalization of US$247m, which means it wouldn’t have the attention of many institutional investors. In the chart below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Menlo Therapeutics.
See our latest analysis for Menlo Therapeutics ” data-reactid=”30″> See our latest analysis for Menlo Therapeutics
What Does The Institutional Ownership Tell Us About Menlo Therapeutics?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Menlo Therapeutics does have institutional investors; and they hold a good portion of the company’s stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Menlo Therapeutics’ historic earnings and revenue below, but keep in mind there’s always more to the story.
It would appear that 14% of Menlo Therapeutics shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Perceptive Advisors LLC is currently the company’s largest shareholder with 14% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 4.9% of common stock, and The Vanguard Group, Inc. holds about 4.2% of the company stock. In addition, we found that David Domzalski, the CEO has 0.7% of the shares allocated to his name
Our studies suggest that the top 25 shareholders collectively control less than half of the company’s shares, meaning that the company’s shares are widely disseminated and there is no dominant shareholder.
Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Menlo Therapeutics
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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.
if those insiders have been buying. ” data-reactid=”72″>Our most recent data indicates that insiders own some shares in Menlo Therapeutics Inc.. In their own names, insiders own US$5.1m worth of stock in the US$247m 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, with a 47% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Next Steps:
3 warning signs we think you should be aware of.” data-reactid=”76″>I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example – Menlo Therapeutics has 3 warning signs we think you should be aware of.
report on analyst forecasts for the company.” data-reactid=”77″>Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”79″>This article by Simply Wall St is general in nature. 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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