What Kind Of Shareholders Hold The Majority In Pro Medicus Limited's (ASX:PME) Shares?

A look at the shareholders of Pro Medicus Limited (ASX:PME) can tell us which group is most powerful. 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.

With a market capitalization of AU$2.5b, Pro Medicus is a decent size, so it is probably on the radar of institutional investors. In the chart below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Pro Medicus.

Check out our latest analysis for Pro Medicus

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.

We can see that Pro Medicus does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Pro Medicus, (below). Of course, keep in mind that there are other factors to consider, too.

Pro Medicus is not owned by hedge funds. With a 27% stake, CEO Sam Hupert is the largest shareholder. In comparison, the second and third largest shareholders hold about 27% and 1.6% of the stock. Interestingly, the second-largest shareholder, Anthony Hall is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.

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 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 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$2.5b, that means insiders have a whopping AU$1.4b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public holds a 33% stake in PME. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Pro Medicus better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Pro Medicus you should know about.

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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