U.S. Markets close in 1 hr 9 mins
  • S&P 500

    4,316.00
    -116.99 (-2.64%)
     
  • Dow 30

    33,693.33
    -891.55 (-2.58%)
     
  • Nasdaq

    14,567.25
    -476.72 (-3.17%)
     
  • Russell 2000

    2,158.02
    -78.85 (-3.53%)
     
  • Crude Oil

    70.40
    -1.57 (-2.18%)
     
  • Gold

    1,763.50
    +12.10 (+0.69%)
     
  • Silver

    22.16
    -0.14 (-0.63%)
     
  • EUR/USD

    1.1730
    -0.0001 (-0.0117%)
     
  • 10-Yr Bond

    1.3060
    -0.0640 (-4.67%)
     
  • Vix

    28.25
    +7.44 (+35.75%)
     
  • GBP/USD

    1.3655
    -0.0082 (-0.5967%)
     
  • USD/JPY

    109.3380
    -0.5570 (-0.5068%)
     
  • BTC-USD

    44,590.88
    -3,435.44 (-7.15%)
     
  • CMC Crypto 200

    1,085.70
    -48.68 (-4.29%)
     
  • FTSE 100

    6,903.91
    -59.73 (-0.86%)
     
  • Nikkei 225

    30,500.05
    +176.75 (+0.58%)
     

What You Need To Know About Eton Pharmaceuticals, Inc.'s (NASDAQ:ETON) Investor Composition

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

A look at the shareholders of Eton Pharmaceuticals, Inc. (NASDAQ:ETON) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

With a market capitalization of US$138m, Eton Pharmaceuticals is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about Eton Pharmaceuticals.

View our latest analysis for Eton Pharmaceuticals

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Eton 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 Eton Pharmaceuticals does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Eton Pharmaceuticals' earnings history below. Of course, the future is what really matters.

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

It looks like hedge funds own 15% of Eton 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. Opaleye Management Inc. is currently the largest shareholder, with 15% of shares outstanding. With 8.1% and 4.4% of the shares outstanding respectively, Harrow Health, Inc. and BlackRock, Inc. are the second and third largest shareholders. In addition, we found that Sean Brynjelsen, the CEO has 4.3% of the shares allocated to their name.

A closer look at our ownership figures suggests that the top 23 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Eton Pharmaceuticals

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Eton Pharmaceuticals, Inc.. In their own names, insiders own US$13m worth of stock in the US$138m company. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, with a 48% stake in the company, will not 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.

Public Company Ownership

It appears to us that public companies own 8.1% of Eton Pharmaceuticals. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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. Take risks for example - Eton Pharmaceuticals has 2 warning signs we think 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.

This article by Simply Wall St is general in nature. 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.

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