Recent uptick might appease 1Life Healthcare, Inc. (NASDAQ:ONEM) institutional owners after losing 73% over the past year

By
Simply Wall St
Published
March 21, 2022
NasdaqGS:ONEM
Source: Shutterstock

A look at the shareholders of 1Life Healthcare, Inc. (NASDAQ:ONEM) can tell us which group is most powerful. The group holding the most number of shares in the company, around 62% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Last week's US$448m market cap gain would probably be appreciated by institutional investors, especially after a year of 73% losses.

In the chart below, we zoom in on the different ownership groups of 1Life Healthcare.

Check out our latest analysis for 1Life Healthcare

ownership-breakdown
NasdaqGS:ONEM Ownership Breakdown March 21st 2022

What Does The Institutional Ownership Tell Us About 1Life Healthcare?

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.

As you can see, institutional investors have a fair amount of stake in 1Life Healthcare. 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 1Life Healthcare's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NasdaqGS:ONEM Earnings and Revenue Growth March 21st 2022

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Our data indicates that hedge funds own 7.2% of 1Life Healthcare. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. The Vanguard Group, Inc. is currently the largest shareholder, with 7.4% of shares outstanding. Tiger Global Management, LLC is the second largest shareholder owning 7.2% of common stock, and The Carlyle Group Inc. holds about 7.1% of the company stock.

A closer look at our ownership figures suggests that the top 11 shareholders have a combined ownership of 52% implying that no single shareholder has a majority.

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 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 1Life Healthcare

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.

Shareholders would probably be interested to learn that insiders own shares in 1Life Healthcare, Inc.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$91m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 1Life Healthcare. 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 Equity Ownership

With an ownership of 12%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with 1Life Healthcare (at least 1 which is significant) , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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