CHC Healthcare Group's (TWSE:4164) market cap dropped NT$1.1b last week; Retail investors bore the brunt

Key Insights

• Significant control over CHC Healthcare Group by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 18 shareholders own 46% of the company
• 12% of CHC Healthcare Group is held by insiders

A look at the shareholders of CHC Healthcare Group (TWSE:4164) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 11% decline in share price, retail investors suffered the most losses.

Let's delve deeper into each type of owner of CHC Healthcare Group, beginning with the chart below.

See our latest analysis for CHC Healthcare Group

What Does The Institutional Ownership Tell Us About CHC Healthcare Group?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that CHC Healthcare Group 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 CHC Healthcare Group, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in CHC Healthcare Group. Princeton Healthcare Limited is currently the largest shareholder, with 17% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.5% and 5.7% of the stock. Interestingly, the bottom two of the top three shareholders also hold the title of Chief Information Officer and Vice Chairman, respectively, suggesting that these insiders have a personal stake in the company.

Our studies suggest that the top 18 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. 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 CHC Healthcare Group

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.

It seems insiders own a significant proportion of CHC Healthcare Group. It has a market capitalization of just NT$8.6b, and insiders have NT$1.1b worth of shares in their own names. 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.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 54% of CHC Healthcare Group shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

Our data indicates that Private Companies hold 24%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand CHC Healthcare Group better, we need to consider many other factors. For example, we've discovered 2 warning signs for CHC Healthcare Group that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.