U.S. Markets close in 53 mins
  • S&P 500

    3,892.53
    -19.21 (-0.49%)
     
  • Dow 30

    31,369.11
    -131.57 (-0.42%)
     
  • Nasdaq

    11,504.65
    -102.97 (-0.89%)
     
  • Russell 2000

    1,777.59
    +11.85 (+0.67%)
     
  • Crude Oil

    109.48
    +1.86 (+1.73%)
     
  • Gold

    1,825.10
    -5.20 (-0.28%)
     
  • Silver

    21.15
    +0.02 (+0.12%)
     
  • EUR/USD

    1.0585
    +0.0027 (+0.2540%)
     
  • 10-Yr Bond

    3.1980
    +0.0730 (+2.34%)
     
  • Vix

    27.20
    -0.03 (-0.11%)
     
  • GBP/USD

    1.2274
    +0.0004 (+0.0319%)
     
  • USD/JPY

    135.4220
    +0.2520 (+0.1864%)
     
  • BTC-USD

    20,773.34
    -428.70 (-2.02%)
     
  • CMC Crypto 200

    452.69
    -9.11 (-1.97%)
     
  • FTSE 100

    7,258.32
    +49.51 (+0.69%)
     
  • Nikkei 225

    26,871.27
    +379.30 (+1.43%)
     

Are Institutions Heavily Invested In Editas Medicine, Inc.'s (NASDAQ:EDIT) Shares?

  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

If you want to know who really controls Editas Medicine, Inc. (NASDAQ:EDIT), then you'll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership.

Editas Medicine has a market capitalization of US$829m, so we would expect some institutional investors to have noticed the stock. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Editas Medicine.

See our latest analysis for Editas Medicine

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Editas Medicine?

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.

Editas Medicine already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Editas Medicine, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
earnings-and-revenue-growth

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Editas Medicine is not owned by hedge funds. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 10%. BlackRock, Inc. is the second largest shareholder owning 9.1% of common stock, and State Street Global Advisors, Inc. holds about 8.0% of the company stock.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 21 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 Editas Medicine

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our data suggests that insiders own under 1% of Editas Medicine, Inc. in their own names. It seems the board members have no more than US$3.7m worth of shares in the US$829m company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Editas Medicine. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Editas Medicine (at least 1 which can't be ignored) , and understanding them should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.