Explore Ocumension Therapeutics's Fair Values from the Community and select yours

Key Insights

• The considerable ownership by private equity firms in Ocumension Therapeutics indicates that they collectively have a greater say in management and business strategy
• A total of 4 investors have a majority stake in the company with 53% ownership
• Recent sales by insiders

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If you want to know who really controls Ocumension Therapeutics (HKG:1477), then you'll have to look at the makeup of its share registry. With 30% stake, private equity firms possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, private equity firms collectively scored the highest last week as the company hit HK$9.3b market cap following a 5.5% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Ocumension Therapeutics.

See our latest analysis for Ocumension Therapeutics

What Does The Institutional Ownership Tell Us About Ocumension 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.

Ocumension 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 Ocumension Therapeutics' historic earnings and revenue below, but keep in mind there's always more to the story.

Ocumension Therapeutics is not owned by hedge funds. Alcon Inc. is currently the largest shareholder, with 17% of shares outstanding. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 11% by the third-largest shareholder. Lian Yong Chen, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Additionally, the company's CEO Ye Liu directly holds 4.7% of the total shares outstanding.

Our research also brought to light the fact that roughly 53% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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

Insider Ownership Of Ocumension 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Ocumension Therapeutics. Insiders own HK$1.5b worth of shares in the HK$9.3b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 23% stake in the company, and hence can't 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.

Private Equity Ownership

Private equity firms hold a 30% stake in Ocumension Therapeutics. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Public Company Ownership

It appears to us that public companies own 17% of Ocumension Therapeutics. 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 Ocumension Therapeutics better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Ocumension Therapeutics 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.