Despite recent sales, Pro Medicus Limited (ASX:PME) insiders still hold the largest share with a 51% interest
Key Insights
Significant insider control over Pro Medicus implies vested interests in company growth
50% of the business is held by the top 3 shareholders
A look at the shareholders of Pro Medicus Limited (ASX:PME) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And insiders own the top position in the company’s share registry despite recent sales.
In the chart below, we zoom in on the different ownership groups of Pro Medicus.
View our latest analysis for Pro Medicus
What Does The Institutional Ownership Tell Us About Pro Medicus?
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 Pro Medicus 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. 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 Pro Medicus' historic earnings and revenue below, but keep in mind there's always more to the story.
Pro Medicus is not owned by hedge funds. With a 24% stake, CEO Sam Hupert is the largest shareholder. With 24% and 2.2% of the shares outstanding respectively, Anthony Hall and The Vanguard Group, Inc. are the second and third largest shareholders. Interestingly, the second-largest shareholder, Anthony Hall is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.
To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Pro Medicus
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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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.
It seems that insiders own more than half the Pro Medicus Limited stock. This gives them a lot of power. That means insiders have a very meaningful AU$5.7b stake in this AU$11b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.
General Public Ownership
With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Pro Medicus. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Pro Medicus is showing 2 warning signs in our investment analysis , and 1 of those shouldn't be ignored...
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.
