What Type Of Shareholders Make Up Evofem Biosciences, Inc.'s (NASDAQ:EVFM) Share Registry?

Simply Wall St

Sat, Mar 6, 2021, 1:05 AM 4 min read

A look at the shareholders of Evofem Biosciences, Inc. (NASDAQ:EVFM) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. We also tend to see lower insider ownership in companies that were previously publicly owned.

Evofem Biosciences is not a large company by global standards. It has a market capitalization of US$190m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Evofem Biosciences.

Check out our latest analysis for Evofem Biosciences

ownership-breakdown — NasdaqCM:EVFM Ownership Breakdown March 6th 2021

What Does The Institutional Ownership Tell Us About Evofem Biosciences?

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.

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

earnings-and-revenue-growth — NasdaqCM:EVFM Earnings and Revenue Growth March 6th 2021

We note that hedge funds don't have a meaningful investment in Evofem Biosciences. The company's largest shareholder is Invesco Ltd., with ownership of 16%. With 6.4% and 4.4% of the shares outstanding respectively, BlackRock, Inc. and The Vanguard Group, Inc. are the second and third largest shareholders. In addition, we found that Saundra Pelletier, the CEO has 1.1% of the shares allocated to their name.

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

Insider Ownership Of Evofem Biosciences

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

I can report that insiders do own shares in Evofem Biosciences, Inc.. In their own names, insiders own US$5.7m worth of stock in the US$190m company. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public -- mostly retail investors -- own 55% of Evofem Biosciences. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 4 warning signs for Evofem Biosciences (3 shouldn't be ignored!) that you should be aware of before investing here.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

This article by Simply Wall St is general in nature. 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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