Opus Genetics, Inc.'s (NASDAQ:IRD) large institutional owners must be happy as stock continues to impress, up 12% over the past week

Key Insights

• Institutions' substantial holdings in Opus Genetics implies that they have significant influence over the company's share price
• A total of 5 investors have a majority stake in the company with 54% ownership
• 15% of Opus Genetics is held by insiders

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A look at the shareholders of Opus Genetics, Inc. (NASDAQ:IRD) can tell us which group is most powerful. The group holding the most number of shares in the company, around 35% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, institutional investors ended up benefitting the most after the company hit US$147m in market cap. One-year return to shareholders is currently 92% and last week’s gain was the icing on the cake.

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

See our latest analysis for Opus Genetics

What Does The Institutional Ownership Tell Us About Opus Genetics?

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 Opus Genetics. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Opus Genetics, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Opus Genetics. Looking at our data, we can see that the largest shareholder is Bios Equity Partners LP with 24% of shares outstanding. For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 6.3% by the third-largest shareholder. Additionally, the company's CEO George Magrath directly holds 1.1% of the total shares outstanding.

On looking further, we found that 54% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in 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 Opus Genetics

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 information suggests that insiders maintain a significant holding in Opus Genetics, Inc.. It has a market capitalization of just US$147m, and insiders have US$21m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in Opus Genetics. 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 30%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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:

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 2 warning signs we've spotted with Opus Genetics (including 1 which is potentially serious) .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.