Could Eden Innovations Ltd’s (ASX:EDE) Investor Composition Influence The Stock Price?

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• ASX:EDE

Could Eden Innovations Ltd’s (ASX:EDE) Investor Composition Influence The Stock Price?

Casey Hall February 1, 2019
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If you want to know who really controls Eden Innovations Ltd (ASX:EDE), then you’ll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’
Eden Innovations is not a large company by global standards. It has a market capitalization of AU$96m, which means it wouldn’t have the attention of many institutional investors. 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 shareholder can tell us about EDE.
See our latest analysis for Eden Innovations

ASX:EDE Ownership Summary February 1st 19
What Does The Institutional Ownership Tell Us About Eden Innovations?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors own 39% of Eden Innovations. 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 Eden Innovations’s earnings history, below. Of course, the future is what really matters.

ASX:EDE Income Statement Export February 1st 19
Eden Innovations is not owned by hedge funds. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Eden Innovations

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. 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.
Shareholders would probably be interested to learn that insiders own shares in Eden Innovations Ltd. As individuals, the insiders collectively own AU$8.6m worth of the AU$96m company. This shows at least some alignment, but I usually like to see larger insider holdings. You can click here to see if those insiders have been buying or 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.
Private Company Ownership

We can see that Private Companies own 4.1%, of the shares on issue. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.