- United States
- Capital Markets
Institutional investors are Summit Healthcare Acquisition Corp.'s (NASDAQ:SMIH) biggest bettors and were rewarded after last week's US$84m market cap gain
- Given the large stake in the stock by institutions, Summit Healthcare Acquisition's stock price might be vulnerable to their trading decisions
- The top 7 shareholders own 53% of the company
- Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
If you want to know who really controls Summit Healthcare Acquisition Corp. (NASDAQ:SMIH), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 36% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And things are looking up for institutional investors after the company gained US$84m in market cap last week. One-year return to shareholders is currently 34% and last week’s gain was the icing on the cake.
Let's delve deeper into each type of owner of Summit Healthcare Acquisition, beginning with the chart below.
View our latest analysis for Summit Healthcare Acquisition
What Does The Institutional Ownership Tell Us About Summit Healthcare Acquisition?
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 Summit Healthcare Acquisition 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. 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 Summit Healthcare Acquisition, (below). Of course, keep in mind that there are other factors to consider, too.
Our data indicates that hedge funds own 21% of Summit Healthcare Acquisition. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Our data shows that Summit Healthcare Acquisition Sponsor LLC is the largest shareholder with 21% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.8% and 6.7%, of the shares outstanding, respectively.
On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Summit Healthcare Acquisition
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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.
We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.
General Public Ownership
The general public-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. 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.
Private Company Ownership
Our data indicates that Private Companies hold 21%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
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. Be aware that Summit Healthcare Acquisition is showing 4 warning signs in our investment analysis , and 2 of those make us uncomfortable...
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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.
Summit Healthcare Acquisition
Summit Healthcare Acquisition Corp. does not have significant operations.
Mediocre balance sheet and slightly overvalued.