Can We See Significant Insider Ownership On The ABIONYX Pharma SA (EPA:ABNX) Share Register?

Every investor in ABIONYX Pharma SA (EPA:ABNX) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.

ABIONYX Pharma is a smaller company with a market capitalization of €26m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let’s take a closer look to see what the different types of shareholder can tell us about ABIONYX Pharma.

See our latest analysis for ABIONYX Pharma

ENXTPA:ABNX Ownership Summary, February 21st 2020
ENXTPA:ABNX Ownership Summary, February 21st 2020

What Does The Institutional Ownership Tell Us About ABIONYX Pharma?

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.

As you can see, institutional investors own 12% of ABIONYX Pharma. 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 ABIONYX Pharma’s earnings history, below. Of course, the future is what really matters.

ENXTPA:ABNX Income Statement, February 21st 2020
ENXTPA:ABNX Income Statement, February 21st 2020

ABIONYX Pharma is not owned by hedge funds. Domundi is currently the company’s largest shareholder with 10% of shares outstanding. With 7.5% and 5.9% of the shares outstanding respectively, Bpifrance Participations SA and Jean-Louis Dasseux are the second and third largest shareholders. Jean-Louis Dasseux also happens to hold the title of Member of the Board of Directors.

A deeper look at our ownership data shows that the top 13 shareholders collectively hold less than 50% of the register, suggesting a large group of small holders where no one share holder 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 ABIONYX Pharma

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.

Shareholders would probably be interested to learn that insiders own shares in ABIONYX Pharma SA. It has a market capitalization of just €26m, and insiders have €1.8m worth of shares, in their own names. 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 57% of ABIONYX Pharma. 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.

Private Equity Ownership

With an ownership of 13%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

We can see that Private Companies own 10%, of the shares on issue. 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:

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. Be aware that ABIONYX Pharma is showing 6 warning signs in our investment analysis , and 2 of those make us uncomfortable…

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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