Key Insights
- Given the large stake in the stock by institutions, Abeona Therapeutics’ stock price might be vulnerable to their trading decisions
- The top 9 shareholders own 52% of the company
- Insiders have bought recently
Every investor in Abeona Therapeutics Inc. (NASDAQ:ABEO) should be aware of the most powerful shareholder groups. We can see that hedge funds own the lion’s share in the company with 33% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And things are looking up for hedge funds 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 229%.
Let’s delve deeper into each type of owner of Abeona Therapeutics, beginning with the chart below.
Check out our latest analysis for Abeona Therapeutics
What Does The Institutional Ownership Tell Us About Abeona Therapeutics?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Abeona Therapeutics does have institutional investors; and they hold a good portion of the company’s stock. 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 Abeona Therapeutics, (below). Of course, keep in mind that there are other factors to consider, too.
It would appear that 33% of Abeona Therapeutics shares are controlled by hedge funds. 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 Adage Capital Management, L.P., with ownership of 13%. Nantahala Capital Management, LLC is the second largest shareholder owning 9.1% of common stock, and Millennium Management LLC holds about 5.7% of the company stock. Additionally, the company’s CEO Vishwas Seshadri directly holds 2.1% of the total shares outstanding.
On further inspection, we found that more than half the company’s shares are owned by the top 9 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 Abeona Therapeutics
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 Abeona Therapeutics Inc.. As individuals, the insiders collectively own US$11m worth of the US$187m 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 28% stake in Abeona Therapeutics. 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:
It’s always worth thinking about the different groups who own shares in a company. But to understand Abeona Therapeutics better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we’ve spotted 3 warning signs for Abeona Therapeutics you should know about.
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.
Valuation is complex, but we’re helping make it simple.
Find out whether Abeona Therapeutics 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.
