Every investor in Aziyo Biologics, Inc. (NASDAQ:AZYO) should be aware of the most powerful shareholder groups. We can see that private equity firms own the lion’s share in the company with 36% 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 collectively scored the highest last week as the company hit US$100m market cap following a 14% gain in the stock.
Let’s delve deeper into each type of owner of Aziyo Biologics, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Aziyo Biologics?
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.
Aziyo Biologics 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 Aziyo Biologics, (below). Of course, keep in mind that there are other factors to consider, too.
It would appear that 19% of Aziyo Biologics shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. HighCape Partners Management, L.P. is currently the company’s largest shareholder with 36% of shares outstanding. With 10% and 8.1% of the shares outstanding respectively, Birchview Capital, LP and Endurant Capital Management LP are the second and third largest shareholders.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.
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 Aziyo Biologics
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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 Aziyo Biologics, Inc.. As individuals, the insiders collectively own US$3.2m worth of the US$100m 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 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Aziyo Biologics. 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 36% stake in Aziyo Biologics. This suggests they can be influential in key policy decisions. 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.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we’ve spotted 5 warning signs for Aziyo Biologics (of which 3 can’t be ignored!) you should know about.
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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