Painful week for private equity firms invested in Aveanna Healthcare Holdings Inc. (NASDAQ:AVAH) after 9.0% drop, institutions also suffered losses

Key Insights

• The considerable ownership by private equity firms in Aveanna Healthcare Holdings indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 65% ownership
• Recent sales by insiders

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A look at the shareholders of Aveanna Healthcare Holdings Inc. (NASDAQ:AVAH) can tell us which group is most powerful. We can see that private equity firms own the lion's share in the company with 65% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 9.0% decrease in the stock price last week, private equity firms suffered the most losses, but institutions who own 15% stock also took a hit.

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

View our latest analysis for Aveanna Healthcare Holdings

What Does The Institutional Ownership Tell Us About Aveanna Healthcare Holdings?

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.

Aveanna Healthcare Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Aveanna Healthcare Holdings' earnings history below. Of course, the future is what really matters.

It would appear that 6.0% of Aveanna Healthcare Holdings shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Bain Capital, LP is currently the largest shareholder, with 40% of shares outstanding. J.H. Whitney Capital Partners, LLC is the second largest shareholder owning 25% of common stock, and Nut Tree Capital Management, LP holds about 6.0% of the company stock. Furthermore, CEO Jeffrey Shaner is the owner of 0.5% of the company's shares.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Aveanna Healthcare Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 Aveanna Healthcare Holdings Inc.. In their own names, insiders own US$24m worth of stock in the US$881m company. This shows at least some alignment. 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 11% stake in Aveanna Healthcare Holdings. 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

Private equity firms hold a 65% stake in Aveanna Healthcare Holdings. This suggests they can be influential in key policy decisions. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Aveanna Healthcare Holdings better, we need to consider many other factors. To that end, you should learn about the 4 warning signs we've spotted with Aveanna Healthcare Holdings (including 2 which don't sit too well with us) .

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.