Aspen Pharmacare Holdings Limited's (JSE:APN) high institutional ownership speaks for itself as stock continues to impress, up 4.0% over last week

Key Insights

• Significantly high institutional ownership implies Aspen Pharmacare Holdings' stock price is sensitive to their trading actions
• The top 6 shareholders own 51% of the company
• Insiders own 17% of Aspen Pharmacare Holdings

A look at the shareholders of Aspen Pharmacare Holdings Limited (JSE:APN) can tell us which group is most powerful. With 43% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Last week’s 4.0% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 21%.

Let's take a closer look to see what the different types of shareholders can tell us about Aspen Pharmacare Holdings.

See our latest analysis for Aspen Pharmacare Holdings

What Does The Institutional Ownership Tell Us About Aspen Pharmacare Holdings?

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 Aspen Pharmacare Holdings does have institutional investors; and they hold a good portion of the company's stock. 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 Aspen Pharmacare Holdings' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Aspen Pharmacare Holdings. The company's largest shareholder is Public Investment Corporation Limited, with ownership of 20%. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 5.2% by the third-largest shareholder. Stephen Saad, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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.

Insider Ownership Of Aspen Pharmacare Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

It seems insiders own a significant proportion of Aspen Pharmacare Holdings Limited. It is very interesting to see that insiders have a meaningful R17b stake in this R97b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Aspen Pharmacare Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

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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.