Both private equity firms who control a good portion of Onward Medical N.V. (EBR:ONWD) along with institutions must be dismayed after last week's 10% decrease

Key Insights

• Significant control over Onward Medical by private equity firms implies that the general public has more power to influence management and governance-related decisions
• 58% of the business is held by the top 5 shareholders
• 22% of Onward Medical is held by Institutions

A look at the shareholders of Onward Medical N.V. (EBR:ONWD) can tell us which group is most powerful. The group holding the most number of shares in the company, around 34% to be precise, is private equity firms. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 22% came under pressure after market cap dropped to €123m last week,private equity firms took the most losses.

In the chart below, we zoom in on the different ownership groups of Onward Medical.

Check out our latest analysis for Onward Medical

What Does The Institutional Ownership Tell Us About Onward Medical?

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.

Onward Medical already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Onward Medical's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Onward Medical. Looking at our data, we can see that the largest shareholder is Nrt Holdings Llc with 12% of shares outstanding. INKEF Netherlands Manager B.V. is the second largest shareholder owning 12% of common stock, and EQT Life Sciences holds about 11% of the company stock. In addition, we found that David Marver, the CEO has 3.1% of the shares allocated to their name.

On looking further, we found that 58% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Onward Medical

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.

Our most recent data indicates that insiders own some shares in Onward Medical N.V.. It has a market capitalization of just €123m, and insiders have €7.9m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though we 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-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With an ownership of 34%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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 21%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Onward Medical (of which 1 is potentially serious!) you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.