What Type Of Shareholders Own The Most Number of Target Healthcare REIT PLC (LON:THRL) Shares?

By
Simply Wall St
Published
March 15, 2021
LSE:THRL
Source: Shutterstock

A look at the shareholders of Target Healthcare REIT PLC (LON:THRL) 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. Companies that used to be publicly owned tend to have lower insider ownership.

With a market capitalization of UK£576m, Target Healthcare REIT is a decent size, so it is probably on the radar of institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Target Healthcare REIT.

Check out our latest analysis for Target Healthcare REIT

ownership-breakdown
LSE:THRL Ownership Breakdown March 16th 2021

What Does The Institutional Ownership Tell Us About Target Healthcare REIT?

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.

Target Healthcare REIT already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Target Healthcare REIT's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
LSE:THRL Earnings and Revenue Growth March 16th 2021

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Target Healthcare REIT. BlackRock, Inc. is currently the company's largest shareholder with 7.5% of shares outstanding. With 6.8% and 6.2% of the shares outstanding respectively, Investec Wealth & Investment Limited and BMO Global Asset Management are the second and third largest shareholders.

After doing some more digging, we found that the top 11 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Target Healthcare REIT

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that Target Healthcare REIT PLC insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It appears that the board holds about UK£169k worth of stock. This compares to a market capitalization of UK£576m. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 16% ownership, the general public have some degree of sway over Target Healthcare REIT. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for Target Healthcare REIT you should be aware of.

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. 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.
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