While insiders own 21% of ProPhase Labs, Inc. (NASDAQ:PRPH), individual investors are its largest shareholders with 60% ownership
If you want to know who really controls ProPhase Labs, Inc. (NASDAQ:PRPH), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 60% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And individual insiders on the other hand have a 21% ownership in the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.
Let's take a closer look to see what the different types of shareholders can tell us about ProPhase Labs.
View our latest analysis for ProPhase Labs
What Does The Institutional Ownership Tell Us About ProPhase Labs?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
ProPhase Labs already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 ProPhase Labs' earnings history below. Of course, the future is what really matters.
ProPhase Labs is not owned by hedge funds. The company's CEO Ted Karkus is the largest shareholder with 19% of shares outstanding. For context, the second largest shareholder holds about 3.6% of the shares outstanding, followed by an ownership of 2.3% by the third-largest shareholder.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of ProPhase Labs
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.
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 information suggests that insiders maintain a significant holding in ProPhase Labs, Inc.. Insiders own US$31m worth of shares in the US$150m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 60% of ProPhase Labs shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand ProPhase Labs better, we need to consider many other factors. For example, we've discovered 3 warning signs for ProPhase Labs (1 is a bit concerning!) that you should be aware of before investing here.
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.
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