Given the large stake in the stock by institutions, GE HealthCare Technologies’ stock price might be vulnerable to their trading decisions
The top 11 shareholders own 51% of the company
Recent sales by insiders
A look at the shareholders of GE HealthCare Technologies Inc. (NASDAQ:GEHC) can tell us which group is most powerful. The group holding the most number of shares in the company, around 77% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
Let’s take a closer look to see what the different types of shareholders can tell us about GE HealthCare Technologies.
See our latest analysis for GE HealthCare Technologies
ownership-breakdown
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 GE HealthCare Technologies does have institutional investors; and they hold a good portion of the company’s stock. 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 GE HealthCare Technologies’ earnings history below. Of course, the future is what really matters.
earnings-and-revenue-growth
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. GE HealthCare Technologies is not owned by hedge funds. Our data shows that Capital Research and Management Company is the largest shareholder with 12% of shares outstanding. With 11% and 7.9% of the shares outstanding respectively, The Vanguard Group, Inc. and BlackRock, Inc. are the second and third largest shareholders.
After doing some more digging, we found that the top 11 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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.
Our most recent data indicates that insiders own less than 1% of GE HealthCare Technologies Inc.. As it is a large company, we’d only expect insiders to own a small percentage of it. But it’s worth noting that they own US$53m worth of shares. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.
With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over GE HealthCare Technologies. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
It’s always worth thinking about the different groups who own shares in a company. But to understand GE HealthCare Technologies better, we need to consider many other factors. For example, we’ve discovered 2 warning signs for GE HealthCare Technologies that you should be aware of before investing here.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.