Institutional investors are Aspen Pharmacare Holdings Limited's (JSE:APN) biggest bettors and were rewarded after last week's R3.4b market cap gain
Key Insights
Significantly high institutional ownership implies Aspen Pharmacare Holdings' stock price is sensitive to their trading actions
A total of 7 investors have a majority stake in the company with 53% ownership
17% of Aspen Pharmacare Holdings is held by insiders
If you want to know who really controls Aspen Pharmacare Holdings Limited (JSE:APN), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And last week, institutional investors ended up benefitting the most after the company hit R90b in market cap. One-year return to shareholders is currently 51% and last week’s gain was the icing on the cake.
In the chart below, we zoom in on the different ownership groups of Aspen Pharmacare Holdings.
Check out our latest analysis for Aspen Pharmacare Holdings
What Does The Institutional Ownership Tell Us About Aspen Pharmacare Holdings?
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.
As you can see, institutional investors have a fair amount of stake in Aspen Pharmacare Holdings. 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 Aspen Pharmacare Holdings' earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Aspen Pharmacare Holdings. Our data shows that Public Investment Corporation Limited is the largest shareholder with 19% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 5.2% by the third-largest shareholder. Stephen Saad, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
We did some more digging and found that 7 of the top shareholders account for roughly 53% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Aspen Pharmacare Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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 a reasonable proportion of Aspen Pharmacare Holdings Limited. Insiders own R15b worth of shares in the R90b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. 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 21% stake in Aspen Pharmacare Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Aspen Pharmacare Holdings better, we need to consider many other factors.
I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.
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.
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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.
