If you want to know who really controls EBR Systems, Inc. (ASX:EBR), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 42% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Meanwhile, private equity firms make up 41% of the company’s shareholders.
Let's take a closer look to see what the different types of shareholders can tell us about EBR Systems.
What Does The Institutional Ownership Tell Us About EBR Systems?
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 EBR Systems. 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. 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 EBR Systems' historic earnings and revenue below, but keep in mind there's always more to the story.
ASX:EBR Earnings and Revenue Growth July 6th 2024
We note that hedge funds don't have a meaningful investment in EBR Systems. Brandon Capital Partners is currently the largest shareholder, with 21% of shares outstanding. M.H. Carnegie & Co. is the second largest shareholder owning 12% of common stock, and Split Rock Partners, LLC holds about 8.7% of the company stock.
We did some more digging and found that 6 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of EBR Systems
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Shareholders would probably be interested to learn that insiders own shares in EBR Systems, Inc.. In their own names, insiders own AU$7.1m worth of stock in the AU$327m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 42% stake in EBR Systems. 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
With a stake of 41%, private equity firms could influence the EBR Systems 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.
Private Company Ownership
Our data indicates that Private Companies hold 3.0%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand EBR Systems better, we need to consider many other factors. For instance, we've identified 3 warning signs for EBR Systems (1 is a bit unpleasant) that you should be aware of.
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.
