The recent 5.1% gain must have brightened CEO Phillip Frost's week, OPKO Health, Inc.'s (NASDAQ:OPK) most bullish insider

Key Insights

• Insiders appear to have a vested interest in OPKO Health's growth, as seen by their sizeable ownership
• A total of 5 investors have a majority stake in the company with 50% ownership
• Institutional ownership in OPKO Health is 26%

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A look at the shareholders of OPKO Health, Inc. (NASDAQ:OPK) can tell us which group is most powerful. With 44% 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).

As a result, insiders scored the highest last week as the company hit US$1.1b market cap following a 5.1% gain in the stock.

In the chart below, we zoom in on the different ownership groups of OPKO Health.

View our latest analysis for OPKO Health

What Does The Institutional Ownership Tell Us About OPKO Health?

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 OPKO Health 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. 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 OPKO Health's historic earnings and revenue below, but keep in mind there's always more to the story.

It would appear that 6.0% of OPKO Health shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's CEO Phillip Frost is the largest shareholder with 31% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.0% and 5.1%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Gary Nabel is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

Our research also brought to light the fact that roughly 50% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. 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 OPKO Health

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.

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 most recent data indicates that insiders own a reasonable proportion of OPKO Health, Inc.. Insiders own US$482m worth of shares in the US$1.1b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in OPKO Health. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand OPKO Health better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with OPKO Health .

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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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.