Fennec Pharmaceuticals Inc.'s (NASDAQ:FENC) market cap surged US$25m last week, individual investors who have a lot riding on the company were rewarded

Key Insights

• Significant control over Fennec Pharmaceuticals by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 7 shareholders own 53% of the company
• Recent sales by insiders

To get a sense of who is truly in control of Fennec Pharmaceuticals Inc. (NASDAQ:FENC), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 31% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, individual investors collectively scored the highest last week as the company hit US$274m market cap following a 10% gain in the stock.

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

View our latest analysis for Fennec Pharmaceuticals

What Does The Institutional Ownership Tell Us About Fennec Pharmaceuticals?

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.

We can see that Fennec Pharmaceuticals does have institutional investors; and they hold a good portion of the company's stock. 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 Fennec Pharmaceuticals' earnings history below. Of course, the future is what really matters.

It looks like hedge funds own 29% of Fennec Pharmaceuticals shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Looking at our data, we can see that the largest shareholder is Southpoint Capital Advisors LP with 15% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 12% and 8.8%, of the shares outstanding, respectively. In addition, we found that Rostislav Raykov, the CEO has 0.7% of the shares allocated to their name.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Fennec Pharmaceuticals

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

We can see that insiders own shares in Fennec Pharmaceuticals Inc.. As individuals, the insiders collectively own US$7.2m worth of the US$274m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Fennec Pharmaceuticals. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 12%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 4 warning signs we've spotted with Fennec Pharmaceuticals (including 1 which is potentially serious) .

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.