CVRx, Inc. (NASDAQ:CVRX) surges 31%; private equity firms who own 45% shares profited along with institutions

Key Insights

• CVRx's significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 6 investors have a majority stake in the company with 54% ownership
• Institutions own 39% of CVRx

To get a sense of who is truly in control of CVRx, Inc. (NASDAQ:CVRX), it is important to understand the ownership structure of the business. We can see that private equity firms own the lion's share in the company with 45% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 31% increase in the stock price last week, private equity firms profited the most, but institutions who own 39% stock also stood to gain from the increase.

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

Check out our latest analysis for CVRx

What Does The Institutional Ownership Tell Us About CVRx?

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 have a fair amount of stake in CVRx. 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. 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 CVRx's historic earnings and revenue below, but keep in mind there's always more to the story.

CVRx is not owned by hedge funds. Our data shows that Johnson & Johnson Innovation - JJDC, Inc. is the largest shareholder with 17% of shares outstanding. New Enterprise Associates, Inc. is the second largest shareholder owning 11% of common stock, and Gilde Healthcare Partners B.V. holds about 8.8% of the company stock.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of CVRx

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that CVRx, Inc. insiders own under 1% of the company. It appears that the board holds about US$3.6m worth of stock. This compares to a market capitalization of US$520m. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 45%, 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand CVRx better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for CVRx you should be aware of.

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.