A look at the shareholders of Sequana Medical NV (EBR:SEQUA) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private equity firms with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
As a result, private equity firms were the biggest beneficiaries of last week’s 15% gain.
Let’s delve deeper into each type of owner of Sequana Medical, beginning with the chart below.
Check out our latest analysis for Sequana Medical
What Does The Institutional Ownership Tell Us About Sequana Medical?
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.
Sequana Medical already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Sequana Medical’s historic earnings and revenue below, but keep in mind there’s always more to the story.
Hedge funds don’t have many shares in Sequana Medical. Neomed Management AS is currently the largest shareholder, with 18% of shares outstanding. With 15% and 7.2% of the shares outstanding respectively, Partners In Equity B.V. and EQT Life Sciences are the second and third largest shareholders.
Our research also brought to light the fact that roughly 53% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.
Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Sequana Medical
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 report that insiders do own shares in Sequana Medical NV. As individuals, the insiders collectively own €6.4m worth of the €147m 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
With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sequana Medical. 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 a stake of 47%, private equity firms could influence the Sequana Medical board. 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 4 warning signs we’ve spotted with Sequana Medical (including 1 which is a bit unpleasant) .
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 Sequana Medical 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.
