enGene Holdings Inc.'s (NASDAQ:ENGN) market cap dropped US$33m last week; individual investors who hold 38% were hit as were institutions

Key Insights

• Significant control over enGene Holdings by private equity firms implies that the general public has more power to influence management and governance-related decisions
• A total of 7 investors have a majority stake in the company with 54% ownership
• Institutions own 35% of enGene Holdings

A look at the shareholders of enGene Holdings Inc. (NASDAQ:ENGN) can tell us which group is most powerful. The group holding the most number of shares in the company, around 38% to be precise, is private equity firms. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions who own 35% came under pressure after market cap dropped to US$267m last week,private equity firms took the most losses.

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

Check out our latest analysis for enGene Holdings

What Does The Institutional Ownership Tell Us About enGene Holdings?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in enGene Holdings. 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. 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 enGene Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

It would appear that 9.8% of enGene Holdings shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Our data shows that VR Adviser, LLC is the largest shareholder with 9.9% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.8% and 8.9%, of the shares outstanding, respectively.

We did some more digging and found that 7 of the top shareholders account for roughly 54% 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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of enGene Holdings

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.

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 less than 1% of enGene Holdings Inc.. However, it's possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just US$267m, and the board has only US$2.6m worth of shares in their own names. 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 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 Equity Ownership

With a stake of 38%, private equity firms could influence the enGene Holdings board. 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:

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. For instance, we've identified 4 warning signs for enGene Holdings (1 can't be ignored) that 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.