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Aroa Biosurgery Limited's (ASX:ARX) top owners are retail investors with 51% stake, while 28% is held by insiders

Key Insights

  • Significant control over Aroa Biosurgery by retail investors implies that the general public has more power to influence management and governance-related decisions

  • A total of 22 investors have a majority stake in the company with 49% ownership

  • Insiders own 28% of Aroa Biosurgery

Every investor in Aroa Biosurgery Limited (ASX:ARX) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Individual insiders, on the other hand, account for 28% of the company's stockholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

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Let's delve deeper into each type of owner of Aroa Biosurgery, beginning with the chart below.

Check out our latest analysis for Aroa Biosurgery

ownership-breakdown
ASX:ARX Ownership Breakdown December 25th 2023

What Does The Institutional Ownership Tell Us About Aroa Biosurgery?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Aroa Biosurgery 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. 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 Aroa Biosurgery's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
ASX:ARX Earnings and Revenue Growth December 25th 2023

We note that hedge funds don't have a meaningful investment in Aroa Biosurgery. Looking at our data, we can see that the largest shareholder is the CEO Brian Ward with 9.6% of shares outstanding. Philip McCaw is the second largest shareholder owning 5.8% of common stock, and Harbour Asset Management Limited holds about 5.2% of the company stock.

A deeper look at our ownership data shows that the top 22 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Aroa Biosurgery

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 Aroa Biosurgery Limited. It has a market capitalization of just AU$271m, and insiders have AU$77m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 51% of Aroa Biosurgery. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Aroa Biosurgery better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.