Key Insights
- Given the large stake in the stock by institutions, Elevation Oncology’s stock price might be vulnerable to their trading decisions
- 51% of the business is held by the top 8 shareholders
- Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
Every investor in Elevation Oncology, Inc. (NASDAQ:ELEV) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 29% to be precise, is hedge funds. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And as as result, hedge funds investors reaped the most rewards after the company’s stock price gained 213% last week. The one-year return on investment is currently 176% and last week’s gain would have been more than welcomed.
Let’s take a closer look to see what the different types of shareholders can tell us about Elevation Oncology.
View our latest analysis for Elevation Oncology
What Does The Institutional Ownership Tell Us About Elevation Oncology?
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 Elevation Oncology. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Elevation Oncology’s earnings history below. Of course, the future is what really matters.
Our data indicates that hedge funds own 29% of Elevation Oncology. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Looking at our data, we can see that the largest shareholder is Tang Capital Management, LLC with 9.4% of shares outstanding. Millennium Management LLC is the second largest shareholder owning 7.1% of common stock, and venBio LLC holds about 6.9% of the company stock.
We also observed that the top 8 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 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 Elevation Oncology
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
We can report that insiders do own shares in Elevation Oncology, Inc.. As individuals, the insiders collectively own US$2.7m worth of the US$116m company. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.
General Public Ownership
With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Elevation Oncology. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
Private equity firms hold a 19% stake in Elevation Oncology. 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 Elevation Oncology better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We’ve identified 5 warning signs with Elevation Oncology (at least 4 which are a bit concerning) , and understanding them should be part of your investment process.
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.
Valuation is complex, but we’re helping make it simple.
Find out whether Elevation Oncology is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.
