Yahoo Finance Private equity firms among Elevation Oncology, Inc.'s (NASDAQ:ELEV) largest shareholders, saw gain in holdings value after stock jumped 34% last week
Key Insights
Elevation Oncology's significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
The top 6 shareholders own 56% of the company
Every investor in Elevation Oncology, Inc. (NASDAQ:ELEV) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are private equity firms with 39% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Clearly, private equity firms benefitted the most after the company's market cap rose by US$33m last week.
Let's take a closer look to see what the different types of shareholders can tell us about Elevation Oncology.
See our latest analysis for Elevation Oncology
What Does The Institutional Ownership Tell Us About Elevation Oncology?
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.
Elevation Oncology 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Elevation Oncology, (below). Of course, keep in mind that there are other factors to consider, too.
Our data indicates that hedge funds own 23% of Elevation Oncology. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is Aisling Capital Management LP, with ownership of 12%. In comparison, the second and third largest shareholders hold about 9.7% and 9.5% of the stock.
We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Elevation Oncology
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
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.
Shareholders would probably be interested to learn that insiders own shares in Elevation Oncology, Inc.. It has a market capitalization of just US$123m, and insiders have US$4.8m worth of shares, in their own names. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 20% 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
With an ownership of 39%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Elevation Oncology better, we need to consider many other factors. For instance, we've identified 6 warning signs for Elevation Oncology (3 shouldn't be ignored) that you should be aware of.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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