Elliptic Laboratories ASA's (OB:ELABS) market cap rose kr241m last week; individual investors who hold 44% profited and so did insiders

Key Insights

• Significant control over Elliptic Laboratories by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 8 investors have a majority stake in the company with 51% ownership
• 31% of Elliptic Laboratories is held by insiders

To get a sense of who is truly in control of Elliptic Laboratories ASA (OB:ELABS), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 44% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that benefitted the most from last week’s kr241m market cap gain, insiders too had a 31% share in those profits.

In the chart below, we zoom in on the different ownership groups of Elliptic Laboratories.

View our latest analysis for Elliptic Laboratories

What Does The Institutional Ownership Tell Us About Elliptic Laboratories?

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 Elliptic Laboratories. 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 Elliptic Laboratories' historic earnings and revenue below, but keep in mind there's always more to the story.

Elliptic Laboratories is not owned by hedge funds. The company's largest shareholder is Tore Engebretsen, with ownership of 12%. In comparison, the second and third largest shareholders hold about 8.1% and 7.1% of the stock. Edvin Austbo, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Laila Danielsen is the owner of 4.2% of the company's shares.

We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Elliptic Laboratories

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.

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.

Our information suggests that insiders maintain a significant holding in Elliptic Laboratories ASA. It has a market capitalization of just kr1.7b, and insiders have kr534m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 44% 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.

Private Company Ownership

Our data indicates that Private Companies hold 4.6%, 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:

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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.