Individual investors are Eupraxia Pharmaceuticals Inc.'s (TSE:EPRX) biggest owners and were hit after market cap dropped CA$20m

Key Insights

• Significant control over Eupraxia Pharmaceuticals by individual investors implies that the general public has more power to influence management and governance-related decisions
• 25% of the business is held by the top 14 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Eupraxia Pharmaceuticals Inc. (TSE:EPRX) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 59% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While individual investors as a group suffered maximum losses after last week’s CA$20m market cap drop, insiders mostly escaped those losses with only a 8.4% stake. Usually, companies that have been privatized tend to have low insider ownership.

Let's delve deeper into each type of owner of Eupraxia Pharmaceuticals, beginning with the chart below.

Check out our latest analysis for Eupraxia Pharmaceuticals

What Does The Institutional Ownership Tell Us About Eupraxia Pharmaceuticals?

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.

Institutions have a very small stake in Eupraxia Pharmaceuticals. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

It would appear that 8.0% of Eupraxia Pharmaceuticals shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Looking at our data, we can see that the largest shareholder is Manchester Management Company, LLC with 10% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.4% and 4.0% of the stock. Additionally, the company's CEO James Helliwell directly holds 2.5% of the total shares outstanding.

A deeper look at our ownership data shows that the top 14 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. 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 Eupraxia Pharmaceuticals

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.

We can report that insiders do own shares in Eupraxia Pharmaceuticals Inc.. In their own names, insiders own CA$11m worth of stock in the CA$135m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 59% stake in Eupraxia Pharmaceuticals, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Eupraxia Pharmaceuticals is showing 3 warning signs in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.