Key Insights

• Given the large stake in the stock by institutions, Atara Biotherapeutics' stock price might be vulnerable to their trading decisions
• 50% of the business is held by the top 7 shareholders
• Insiders have sold recently

A look at the shareholders of Atara Biotherapeutics, Inc. (NASDAQ:ATRA) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 48% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And things are looking up for institutional investors after the company gained US$20m in market cap last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 16%.

In the chart below, we zoom in on the different ownership groups of Atara Biotherapeutics.

View our latest analysis for Atara Biotherapeutics

What Does The Institutional Ownership Tell Us About Atara Biotherapeutics?

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.

Atara Biotherapeutics 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 Atara Biotherapeutics' earnings history below. Of course, the future is what really matters.

Our data indicates that hedge funds own 16% of Atara Biotherapeutics. 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 Adiumentum Capital Management, with ownership of 20%. With 8.6% and 7.9% of the shares outstanding respectively, EcoR1 Capital, LLC and Redmile Group, LLC are the second and third largest shareholders.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Atara Biotherapeutics

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own some shares in Atara Biotherapeutics, Inc.. In their own names, insiders own US$2.3m worth of stock in the US$104m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in Atara Biotherapeutics. 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.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 5 warning signs for Atara Biotherapeutics (1 doesn't sit too well with us) 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.

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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.