Following a 53% decline over last year, recent gains may please SHL Telemedicine Ltd. (VTX:SHLTN) institutional owners

Key Insights

• Significantly high institutional ownership implies SHL Telemedicine's stock price is sensitive to their trading actions

• A total of 3 investors have a majority stake in the company with 56% ownership

• Insider ownership in SHL Telemedicine is 12%

To get a sense of who is truly in control of SHL Telemedicine Ltd. (VTX:SHLTN), it is important to understand the ownership structure of the business. With 55% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Last week's CHF15m market cap gain would probably be appreciated by institutional investors, especially after a year of 53% losses.

Let's delve deeper into each type of owner of SHL Telemedicine, beginning with the chart below.

Check out our latest analysis for SHL Telemedicine

What Does The Institutional Ownership Tell Us About SHL Telemedicine?

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.

We can see that SHL Telemedicine does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 SHL Telemedicine's earnings history below. Of course, the future is what really matters.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. It looks like hedge funds own 8.9% of SHL Telemedicine 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. GF Fund Management Co., Ltd. is currently the largest shareholder, with 36% of shares outstanding. Intergemel Provident Funds and Pension Ltd. is the second largest shareholder owning 11% of common stock, and Sphera Funds Management Ltd holds about 8.9% of the company stock.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of SHL Telemedicine

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 information suggests that insiders maintain a significant holding in SHL Telemedicine Ltd.. Insiders have a CHF13m stake in this CHF107m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 13%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 3 warning signs for SHL Telemedicine (2 don't sit too well with us!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.