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The big shareholder groups in Fennec Pharmaceuticals Inc. (NASDAQ:FENC) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.
With a market capitalization of US$166m, Fennec Pharmaceuticals is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Fennec Pharmaceuticals.
Check out our latest analysis for Fennec Pharmaceuticals
What Does The Institutional Ownership Tell Us About Fennec Pharmaceuticals?
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 Fennec Pharmaceuticals does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Fennec Pharmaceuticals' historic earnings and revenue below, but keep in mind there's always more to the story.
It would appear that 16% of Fennec Pharmaceuticals 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. Looking at our data, we can see that the largest shareholder is Southpoint Capital Advisors LP with 16% of shares outstanding. The Sonic Fund II, L.P. is the second largest shareholder owning 9.2% of common stock, and DG Capital Management, LLC holds about 4.6% of the company stock. Additionally, the company's CEO Rostislav Raykov directly holds 0.8% of the total shares outstanding.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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.