How much of Population Health Investment Co., Inc. (NASDAQ:PHIC) do institutions own?
Every investor in Population Health Investment Co., Inc. (NASDAQ: PHIC) should know the most powerful shareholder groups. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. We also tend to see a decline in insider participation in companies that were previously public.
With a market capitalization of $214 million, Population Health Investment is a small cap stock, so it may not be well known to many institutional investors. Looking at our ownership group data (below), it appears that institutional investors have bought the company. Let’s take a closer look at what different types of shareholders can tell us about Investing in Population Health.
What does institutional ownership tell us about investing in population health?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.
We can see that Population Health Investment has institutional investors; and they own a good part of the shares of the company. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see the historic profits and revenues of Investing in Population Health below, but keep in mind there’s always more to tell.
Since institutional investors own more than half of the issued shares, the board will likely have to pay attention to their preferences. Reportedly, 14% of Population Health Investment’s shares are controlled by hedge funds. This is interesting because hedge funds can be very active and militant. Many are looking for medium-term catalysts that will drive the stock price higher. Levin Capital Strategies, LP is currently the largest shareholder, with 8.4% of the shares outstanding. Maverick Capital, Ltd. is the second-largest shareholder with 5.5% of the common stock, and Sculptor Capital Management, Inc. owns approximately 4.5% of the company’s stock.
A closer look at our ownership figures suggests that the top 17 shareholders hold a combined ownership of 50%, implying that no single shareholder has a majority.
While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. We don’t see any analyst coverage of the stock at this time, so the company is unlikely to be widely held.
Internal ownership of population health investment
The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.
Our data suggests that insiders hold less than 1% of Population Health Investment Co., Inc. in their own name. It appears the board owns about $1.7 million worth of stock. This compares to a market capitalization of US$214 million. We generally like to see a more invested board. However it may be worth checking if these insiders bought.
General public property
The general public, including retail investors, owns 29% of the company’s capital and therefore cannot be easily ignored. While that size of ownership might not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.
It is always useful to think about the different groups that own shares in a company. But to better understand investment in population health, we need to consider many other factors. Take for example the ubiquitous specter of investment risk. We have identified 4 warning signs with Population Health Investment (at least 3 of which are of little concern) and understanding them should be part of your investment process.
If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of interesting companies, supported by solid financial data.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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