A look at the shareholders of Harmonicare Medical Holdings Limited (HKG:1509) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. 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.’
With a market capitalization of HK$1.6b, Harmonicare Medical Holdings is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about 1509.
View our latest analysis for Harmonicare Medical Holdings
What Does The Institutional Ownership Tell Us About Harmonicare Medical Holdings?
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.
We can see that Harmonicare Medical Holdings does have institutional investors; and they hold 28% of the 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. 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 Harmonicare Medical Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don’t have many shares in Harmonicare Medical Holdings. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Harmonicare Medical Holdings
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders maintain a significant holding in Harmonicare Medical Holdings Limited. Insiders have a HK$476m stake in this HK$1.6b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.