What you need to know about the investor mix at Cidara Therapeutics, Inc. (NASDAQ: CDTX)
Every investor in Cidara Therapeutics, Inc. (NASDAQ: CDTX) should know the most powerful shareholder groups. Institutions often own shares in larger companies, and we would expect insiders to own a noticeable percentage of smaller ones. I like to see at least a little insider ownership. As Charlie Munger said, “Show me the incentive and I’ll show you the result.
Cidara Therapeutics is not a large company by global standards. It has a market cap of US $ 111 million, which means it wouldn’t get the attention of many institutional investors. Our analysis of company ownership, below, shows that institutional investors bought the company. Let’s dig deeper into each type of owner, to find out more about Cidara Therapeutics.
Check out our latest review for Cidara Therapeutics
What does institutional ownership tell us about Cidara Therapeutics?
Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
We can see that Cidara Therapeutics has institutional investors; and they own a good portion of the company’s shares. This suggests some credibility among professional investors. But we cannot trust this fact alone because institutions sometimes make bad investments, like everyone else. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell stocks quickly. This risk is higher in a company with no history of growth. You can see Cidara Therapeutics’ historical revenue and revenue below, but keep in mind that there is always more to tell.
It appears that hedge funds hold 8.8% of Cidara Therapeutics shares. This is interesting, because hedge funds can be quite active and activist. Many are looking for medium-term catalysts that will drive up the share price. Looking at our data, we can see that the largest shareholder is Mundipharma International Limited with 9.7% of the shares outstanding. For context, the second largest shareholder owns around 8.8% of the outstanding shares, followed by a 6.7% stake by the third largest shareholder. In addition, the CEO of the company, Jeffrey Stein, directly owns 1.4% of the total shares outstanding.
Looking at the register of shareholders, we can see that 50% of the property is controlled by the 13 major shareholders, which means that no shareholder has a controlling interest in the property.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. Many analysts cover the stock, so it can be interesting to see what they are forecasting as well.
Insider Property of Cidara Therapeutics
The definition of business insiders can be subjective and vary from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company manages the company, but the CEO will report to the board of directors, even if he is a member of the board.
Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
We can see that insiders own shares of Cidara Therapeutics, Inc. In their own name, insiders own shares worth US $ 9.8 million in the company worth US $ 111 million. Some would say this shows the alignment of interests between shareholders and the board, although I generally prefer to see larger insider holdings. But it might be worth checking out if these insiders have sold.
General public property
The general public, with a 40% stake in the company, will not be easily ignored. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.
Owned by a private company
It can be seen that private companies hold 9.7% of the shares issued. It is difficult to draw conclusions from this fact alone, so it is worth considering who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.
It’s always worth thinking about the different groups that own shares in a company. But to better understand Cidara Therapeutics, there are many other factors to consider. To do this, you need to know the 3 warning signs we spotted with Cidara Therapeutics.
But finally it’s the future, not the past, which will determine the success of the owners of this business. Therefore, we believe it is advisable to take a look at this free report showing whether analysts are predicting a better future.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St does not have any position in the mentioned stocks.
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