49% of Pro Medicus Limited (ASX:PME) is owned by insiders, and they've been buying recently

Key Insights

• Insiders appear to have a vested interest in Pro Medicus' growth, as seen by their sizeable ownership
• 51% of the business is held by the top 4 shareholders
• Recent purchases by insiders

To get a sense of who is truly in control of Pro Medicus Limited (ASX:PME), it is important to understand the ownership structure of the business. With 49% stake, individual insiders 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).

A quick look at our data suggests that insiders have been buying shares in the company recently. This could signal that stock prices could go up and insiders are here for it.

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

See our latest analysis for Pro Medicus

What Does The Institutional Ownership Tell Us About Pro Medicus?

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 Pro Medicus does have institutional investors; and they hold a good portion of the company's 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. 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 Pro Medicus' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Pro Medicus. The company's CEO Sam Hupert is the largest shareholder with 23% of shares outstanding. Anthony Hall is the second largest shareholder owning 23% of common stock, and The Vanguard Group, Inc. holds about 2.8% of the company 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.

On looking further, we found that 51% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Pro Medicus Limited. It has a market capitalization of just AU$24b, and insiders have AU$12b worth of shares in their own names. That's quite significant. 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

The general public, who are usually individual investors, hold a 37% 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:

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.

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.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.