EZZ Life Science Holdings Limited (ASX:EZZ) surges 15%; public companies who own 38% shares profited along with insiders

Key Insights

• The considerable ownership by public companies in EZZ Life Science Holdings indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 64% of the company
• Insider ownership in EZZ Life Science Holdings is 33%

Every investor in EZZ Life Science Holdings Limited (ASX:EZZ) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 38% to be precise, is public companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Public companies gained the most after market cap touched AU$159m last week, while insiders who own 33% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about EZZ Life Science Holdings.

View our latest analysis for EZZ Life Science Holdings

What Does The Lack Of Institutional Ownership Tell Us About EZZ Life Science Holdings?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of EZZ Life Science Holdings, for yourself, below.

EZZ Life Science Holdings is not owned by hedge funds. Macquarie Group Limited is currently the largest shareholder, with 38% of shares outstanding. In comparison, the second and third largest shareholders hold about 26% and 1.8% of the stock. Mark Qin, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of EZZ Life Science Holdings

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

Our information suggests that insiders maintain a significant holding in EZZ Life Science Holdings Limited. It has a market capitalization of just AU$159m, and insiders have AU$53m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 27% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

It appears to us that public companies own 38% of EZZ Life Science Holdings. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for EZZ Life Science Holdings you should be aware of, and 1 of them is a bit concerning.

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.