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The big shareholder groups in AHAlife Holdings Limited (ASX:AHL) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’
AHAlife Holdings is a smaller company with a market capitalization of AU$11m, so it may still be flying under the radar of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about AHL.
Check out our latest analysis for AHAlife Holdings
What Does The Institutional Ownership Tell Us About AHAlife Holdings?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
AHAlife Holdings already has institutions on the share registry. Indeed, they own 7.9% of the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of AHAlife Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don’t have a meaningful investment in AHAlife Holdings. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of AHAlife Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 a reasonable proportion of AHAlife Holdings Limited. Insiders own AU$4m worth of shares in the AU$11m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.