Yahoo Finance With 40% stake, ESSA Pharma Inc. (NASDAQ:EPIX) seems to have captured hedge funds investors' interest
Key Insights
Institutions' substantial holdings in ESSA Pharma implies that they have significant influence over the company's share price
55% of the business is held by the top 4 shareholders
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
A look at the shareholders of ESSA Pharma Inc. (NASDAQ:EPIX) can tell us which group is most powerful. We can see that hedge funds own the lion's share in the company with 40% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Given the vast amount of money and research capacities at their disposal, hedge funds ownership tends to carry a lot of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's take a closer look to see what the different types of shareholders can tell us about ESSA Pharma.
View our latest analysis for ESSA Pharma
What Does The Institutional Ownership Tell Us About ESSA Pharma?
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.
As you can see, institutional investors have a fair amount of stake in ESSA Pharma. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 ESSA Pharma's historic earnings and revenue below, but keep in mind there's always more to the story.
It would appear that 40% of ESSA Pharma shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. BVF Partners L.P. is currently the company's largest shareholder with 20% of shares outstanding. Bellevue Asset Management AG is the second largest shareholder owning 18% of common stock, and Morgan Stanley, Investment Banking and Brokerage Investments holds about 9.4% of the company stock.
Our research also brought to light the fact that roughly 55% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.
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.
Insider Ownership Of ESSA Pharma
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
We can report that insiders do own shares in ESSA Pharma Inc.. As individuals, the insiders collectively own US$5.2m worth of the US$233m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 19% stake in ESSA Pharma. 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand ESSA Pharma better, we need to consider many other factors. For example, we've discovered 4 warning signs for ESSA Pharma (2 don't sit too well with us!) 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.
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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
