Painful week for individual investors invested in SOPHiA GENETICS SA (NASDAQ:SOPH) after 16% drop, institutions also suffered losses

By
Simply Wall St
Published
May 09, 2022
NasdaqGS:SOPH
Source: Shutterstock

If you want to know who really controls SOPHiA GENETICS SA (NASDAQ:SOPH), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 47% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 16% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 32% stock also took a hit.

Let's delve deeper into each type of owner of SOPHiA GENETICS, beginning with the chart below.

See our latest analysis for SOPHiA GENETICS

ownership-breakdown
NasdaqGS:SOPH Ownership Breakdown May 9th 2022

What Does The Institutional Ownership Tell Us About SOPHiA GENETICS?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in SOPHiA GENETICS. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at SOPHiA GENETICS' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGS:SOPH Earnings and Revenue Growth May 9th 2022

SOPHiA GENETICS is not owned by hedge funds. The company's largest shareholder is Alychlo NV, with ownership of 11%. Meanwhile, the second and third largest shareholders, hold 11% and 5.3%, of the shares outstanding, respectively. In addition, we found that Jurgi Camblong, the CEO has 3.5% of the shares allocated to their name.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 15 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of SOPHiA GENETICS

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

We can report that insiders do own shares in SOPHiA GENETICS SA. It has a market capitalization of just US$346m, and insiders have US$17m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 47% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SOPHiA GENETICS. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 16% stake in SOPHiA GENETICS. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with SOPHiA GENETICS (including 1 which is a bit concerning) .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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