Key Insights
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Given the large stake in the stock by institutions, Netcare's stock price might be vulnerable to their trading decisions
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A total of 5 investors have a majority stake in the company with 54% ownership
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Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
Every investor in Netcare Limited (JSE:NTC) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 61% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.
Let's delve deeper into each type of owner of Netcare, beginning with the chart below.
See our latest analysis for Netcare
What Does The Institutional Ownership Tell Us About Netcare?
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 Netcare does have institutional investors; and they hold a good portion of the company's stock. 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 Netcare's earnings history below. Of course, the future is what really matters.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Netcare. Looking at our data, we can see that the largest shareholder is Public Investment Corporation Limited with 27% of shares outstanding. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 5.5% by the third-largest shareholder.
On looking further, we found that 54% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.