64.8 F
London
June 19, 2024
PI Global Investments
Hedge Funds

With 29% ownership in Elevation Oncology, Inc. (NASDAQ:ELEV), hedge funds investors have a lot riding on the business


Key Insights

  • Significantly high institutional ownership implies Elevation Oncology’s stock price is sensitive to their trading actions

  • A total of 8 investors have a majority stake in the company with 51% ownership

  • Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

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 things are looking up for hedge funds investors after the company gained US$79m in market cap last week. The one-year return on investment is currently 176% and last week’s gain would have been more than welcomed.

In the chart below, we zoom in on the different ownership groups of Elevation Oncology.

View our latest analysis for Elevation Oncology

ownership-breakdownownership-breakdown

ownership-breakdown

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 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 Elevation Oncology, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growthearnings-and-revenue-growth

earnings-and-revenue-growth

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. For context, the second largest shareholder holds about 7.1% of the shares outstanding, followed by an ownership of 6.9% by the third-largest shareholder.

On further inspection, we found that more than half the company’s shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Elevation Oncology

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.

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.. It has a market capitalization of just US$116m, and insiders have US$2.7m worth of shares, in their own names. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Elevation Oncology. 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 an ownership of 19%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example – Elevation Oncology has 5 warning signs (and 4 which are significant) we think you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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