Yahoo Finance Venus Concept Inc.'s (NASDAQ:VERO) market cap surged US$37m last week, individual investors who have a lot riding on the company were rewarded
Key Insights
The considerable ownership by individual investors in Venus Concept indicates that they collectively have a greater say in management and business strategy
53% of the business is held by the top 5 shareholders
A look at the shareholders of Venus Concept Inc. (NASDAQ:VERO) can tell us which group is most powerful. The group holding the most number of shares in the company, around 36% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As a result, individual investors were the biggest beneficiaries of last week’s 16% gain.
Let's take a closer look to see what the different types of shareholders can tell us about Venus Concept.
Check out our latest analysis for Venus Concept
What Does The Institutional Ownership Tell Us About Venus Concept?
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.
As you can see, institutional investors have a fair amount of stake in Venus Concept. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Venus Concept's earnings history below. Of course, the future is what really matters.
Our data indicates that hedge funds own 12% of Venus Concept. 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. Looking at our data, we can see that the largest shareholder is Essex Woodlands Management, Inc. with 20% of shares outstanding. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 8.5% by the third-largest shareholder. Furthermore, CEO Rajiv Kanishka De Silva is the owner of 1.6% of the company's shares.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Venus Concept
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
We can see that insiders own shares in Venus Concept Inc.. It has a market capitalization of just US$270m, and insiders have US$13m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 36% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Equity Ownership
Private equity firms hold a 29% stake in Venus Concept. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Venus Concept better, we need to consider many other factors. For example, we've discovered 4 warning signs for Venus Concept (2 are concerning!) that you should be aware of before investing here.
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.
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