In This Article:
Key Insights
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The considerable ownership by retail investors in Cochlear indicates that they collectively have a greater say in management and business strategy
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40% of the business is held by the top 25 shareholders
Every investor in Cochlear Limited (ASX:COH) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While institutions who own 45% came under pressure after market cap dropped to AU$21b last week,retail investors took the most losses.
Let's take a closer look to see what the different types of shareholders can tell us about Cochlear.
Check out our latest analysis for Cochlear
What Does The Institutional Ownership Tell Us About Cochlear?
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.
As you can see, institutional investors have a fair amount of stake in Cochlear. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Cochlear's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Cochlear. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 6.8% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.9% and 5.4% of the stock.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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.
Insider Ownership Of Cochlear
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.