Astria Therapeutics, Inc. (NASDAQ:ATXS) Stock Price Falls 11% Last Week; individual investors would not be happy

Every investor in Astria Therapeutics, Inc. (NASDAQ: ATXS) should know the most powerful shareholder groups. We can see that individual investors hold the lion’s share of the company with 33% ownership. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).

As a result, individual investors as a group suffered the highest losses last week after the market capitalization fell by $17 million.

In the table below we zoom in on the different ownership groups of Astria Therapeutics.

Before looking at the breakdown of owners, note that our analysis indicates that ATXS is potentially overrated!

NasdaqGM: ATXS ownership breakdown on September 28, 2022

What does institutional ownership tell us about Astria 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 Astria Therapeutics has institutional investors; and they own a good part of the shares of the company. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Astria Therapeutics’ revenue and historical revenue below, but keep in mind there’s always more to tell.

earnings-and-revenue-growth
NasdaqGM: ATXS Earnings and Revenue Growth September 28, 2022

Reportedly, 14% of Astria Therapeutics shares are controlled by hedge funds. This catches my attention because hedge funds sometimes try to influence management or make changes that will create short-term shareholder value. Perceptive Advisors LLC is currently the company’s largest shareholder with 8.4% of the shares outstanding. Xontogeny LLC is the second largest shareholder with 8.4% of the common stock and Cormorant Asset Management, LP owns approximately 7.9% of the company’s stock.

We dug a little deeper and found that 8 of the major shareholders make up about 51% of the register, implying that along with the large shareholders, there are a few smaller shareholders, thus balancing everyone’s interests somewhat.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to know their overall view on the future.

Insider owned by Astria Therapeutics

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

We can see that insiders own shares in Astria Therapeutics, Inc. As individuals, insiders collectively own $2.4 million of the $137 million company. Some would say this shows the alignment of interests between shareholders and the board, although we generally prefer to see larger insider participations. But it might be worth checking to see if these insiders have sold.

General public property

The general public, who are usually individual investors, hold a 33% stake in Astria Therapeutics. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.

Private equity ownership

With a 28% stake, private equity firms could sway Astria Therapeutics’ board. This might appeal to some, because private equity is sometimes an activist who holds management accountable. But other times, the private equity sells off, after taking the company public.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Astria Therapeutics, we need to consider many other factors. Know that Astria Therapeutics shows 4 warning signs in our investment analysis and 1 of them is significant…

If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Find out if Astria Therapeutic is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

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Karen J. Nelson