Despite recent sales, Pro Medicus Limited (ASX:PME) insiders still hold the largest share with a 53% interest

Simply Wall St

Thu, Mar 23, 2023, 7:56 PM 4 min read

Key Insights

Insiders appear to have a vested interest in Pro Medicus' growth, as seen by their sizeable ownership
The top 2 shareholders own 50% of the company
Insiders have been selling lately

A look at the shareholders of Pro Medicus Limited (ASX:PME) can tell us which group is most powerful. The group holding the most number of shares in the company, around 53% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Despite recent sales, insiders own the most shares in the company.

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

See our latest analysis for Pro Medicus

ownership-breakdown — ASX:PME Ownership Breakdown March 24th 2023

What Does The Institutional Ownership Tell Us About Pro Medicus?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Pro Medicus. 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 Pro Medicus' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — ASX:PME Earnings and Revenue Growth March 24th 2023

Hedge funds don't have many shares in Pro Medicus. With a 25% stake, CEO Sam Hupert is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 25% and 2.1%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, Anthony Hall is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Pro Medicus

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.

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 own more than half of Pro Medicus Limited. This gives them effective control of the company. Given it has a market cap of AU$6.7b, that means insiders have a whopping AU$3.6b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 35% stake in Pro Medicus. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

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 2 warning signs for Pro Medicus (1 is significant!) 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

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