With 63% institutional ownership, AfterNext HealthTech Acquisition Corp. (NYSE:AFTR) is a favorite amongst the big guns
Key Insights
Significantly high institutional ownership implies AfterNext HealthTech Acquisition's stock price is sensitive to their trading actions
53% of the business is held by the top 8 shareholders
Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
A look at the shareholders of AfterNext HealthTech Acquisition Corp. (NYSE:AFTR) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 63% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
Let's delve deeper into each type of owner of AfterNext HealthTech Acquisition, beginning with the chart below.
Check out our latest analysis for AfterNext HealthTech Acquisition
What Does The Institutional Ownership Tell Us About AfterNext HealthTech Acquisition?
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.
AfterNext HealthTech Acquisition already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see AfterNext HealthTech Acquisition's historic earnings and revenue below, but keep in mind there's always more to the story.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. It looks like hedge funds own 6.5% of AfterNext HealthTech Acquisition shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. TPG Capital, L.P. is currently the largest shareholder, with 19% of shares outstanding. Aristeia Capital, LLC is the second largest shareholder owning 6.5% of common stock, and Cantor Fitzgerald Asset Management holds about 6.0% of the company stock.
We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of AfterNext HealthTech Acquisition
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Our most recent data indicates that insiders own less than 1% of AfterNext HealthTech Acquisition Corp.. It appears that the board holds about US$2.1m worth of stock. This compares to a market capitalization of US$323m. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 10% stake in AfterNext HealthTech Acquisition. 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 a stake of 19%, private equity firms could influence the AfterNext HealthTech Acquisition board. 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:
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. Case in point: We've spotted 4 warning signs for AfterNext HealthTech Acquisition you should be aware of, and 3 of them can't be ignored.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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