Home Hedge Funds While hedge funds own 33% of Larimar Therapeutics, Inc. (NASDAQ:LRMR), individual investors...

While hedge funds own 33% of Larimar Therapeutics, Inc. (NASDAQ:LRMR), individual investors are its largest shareholders with 47% ownership

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To get a sense of who is truly in control of Larimar Therapeutics, Inc. (NASDAQ:LRMR), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, hedge funds make up 33% of the company’s shareholders.

Let’s delve deeper into each type of owner of Larimar Therapeutics, beginning with the chart below.

Check out our latest analysis for Larimar Therapeutics

ownership-breakdown

ownership-breakdown

What Does The Institutional Ownership Tell Us About Larimar 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.

As you can see, institutional investors have a fair amount of stake in Larimar Therapeutics. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Larimar Therapeutics’ earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth

earnings-and-revenue-growth

It would appear that 33% of Larimar Therapeutics shares are controlled by hedge funds. That’s interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. The company’s largest shareholder is Deerfield Management Company, L.P. Series C, with ownership of 33%. CHI Advisors LLC is the second largest shareholder owning 3.5% of common stock, and RA Capital Management, L.P. holds about 2.4% of the company stock.

After doing some more digging, we found that the top 13 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Larimar Therapeutics

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 information suggests that Larimar Therapeutics, Inc. insiders own under 1% of the company. It seems the board members have no more than US$515k worth of shares in the US$138m company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, who are usually individual investors, hold a 47% stake in Larimar Therapeutics. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Larimar Therapeutics better, we need to consider many other factors. For instance, we’ve identified 4 warning signs for Larimar Therapeutics (2 shouldn’t be ignored) 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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