U.S. Markets open in 6 hrs 18 mins
  • S&P Futures

    3,784.50
    -18.75 (-0.49%)
     
  • Dow Futures

    30,229.00
    -136.00 (-0.45%)
     
  • Nasdaq Futures

    11,580.50
    -60.25 (-0.52%)
     
  • Russell 2000 Futures

    1,769.20
    -12.30 (-0.69%)
     
  • Crude Oil

    86.47
    -0.05 (-0.06%)
     
  • Gold

    1,732.60
    +2.10 (+0.12%)
     
  • Silver

    20.98
    -0.12 (-0.59%)
     
  • EUR/USD

    0.9974
    -0.0012 (-0.1197%)
     
  • 10-Yr Bond

    3.6170
    0.0000 (0.00%)
     
  • Vix

    29.07
    -1.03 (-3.42%)
     
  • GBP/USD

    1.1461
    -0.0013 (-0.1158%)
     
  • USD/JPY

    144.2350
    +0.0360 (+0.0250%)
     
  • BTC-USD

    20,235.07
    +381.26 (+1.92%)
     
  • CMC Crypto 200

    458.91
    +13.48 (+3.03%)
     
  • FTSE 100

    7,086.46
    0.00 (0.00%)
     
  • Nikkei 225

    27,120.53
    +128.32 (+0.48%)
     

Hedge funds own 29% of HLS Therapeutics Inc. (TSE:HLS) shares but individual investors control 37% of the company

·4 min read

If you want to know who really controls HLS Therapeutics Inc. (TSE:HLS), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 37% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, hedge funds make up 29% of the company’s shareholders.

In the chart below, we zoom in on the different ownership groups of HLS Therapeutics.

View our latest analysis for HLS Therapeutics

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About HLS Therapeutics?

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.

HLS Therapeutics 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. 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 HLS Therapeutics' historic earnings and revenue below, but keep in mind there's always more to the story.

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

It looks like hedge funds own 29% of HLS Therapeutics 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. The company's largest shareholder is Stadium Capital Management, LLC, with ownership of 18%. With 13% and 10% of the shares outstanding respectively, Athyrium Capital Management, LP and Polar Asset Management Partners Inc. are the second and third largest shareholders. Additionally, the company's CEO Gilbert Godin directly holds 2.9% of the total shares outstanding.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of HLS Therapeutics

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.

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.

We can see that insiders own shares in HLS Therapeutics Inc.. In their own names, insiders own CA$12m worth of stock in the CA$357m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over HLS Therapeutics. 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

Private equity firms hold a 13% stake in HLS Therapeutics. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for HLS Therapeutics you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here