Great week for Pro-Dex, Inc. (NASDAQ:PDEX) hedge funds investors after losing 24% over the previous year

Key Insights

• Given the large stake in the stock by institutions, Pro-Dex's stock price might be vulnerable to their trading decisions
• A total of 6 investors have a majority stake in the company with 52% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

A look at the shareholders of Pro-Dex, Inc. (NASDAQ:PDEX) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are hedge funds with 37% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

After a year of 24% losses, last week’s 12% gain would be welcomed by hedge funds investors as a possible sign that returns might start trending higher.

Let's delve deeper into each type of owner of Pro-Dex, beginning with the chart below.

See our latest analysis for Pro-Dex

What Does The Institutional Ownership Tell Us About Pro-Dex?

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 Pro-Dex does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Pro-Dex, (below). Of course, keep in mind that there are other factors to consider, too.

It looks like hedge funds own 37% of Pro-Dex shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Looking at our data, we can see that the largest shareholder is AO Partners Llc with 28% of shares outstanding. Farnam Street Capital, Inc. is the second largest shareholder owning 8.3% of common stock, and BlackRock, Inc. holds about 4.8% of the company stock. Additionally, the company's CEO Richard Van Kirk directly holds 3.1% of the total shares outstanding.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Pro-Dex

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own some shares in Pro-Dex, Inc.. As individuals, the insiders collectively own US$11m worth of the US$133m company. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 32% stake in the company, and hence can't easily be ignored. 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 Pro-Dex you should be aware of, and 1 of them shouldn't be ignored.

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.