SOPHiA GENETICS SA's (NASDAQ:SOPH) market cap touched US$204m last week, benefiting both individual investors who own 51% as well as institutions

Key Insights

• Significant control over SOPHiA GENETICS by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 25 investors have a majority stake in the company with 49% ownership
• 27% of SOPHiA GENETICS is held by Institutions

Our free stock report includes 2 warning signs investors should be aware of before investing in SOPHiA GENETICS. Read for free now.

To get a sense of who is truly in control of SOPHiA GENETICS SA (NASDAQ:SOPH), it is important to understand the ownership structure of the business. With 51% stake, individual investors 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).

Following a 12% increase in the stock price last week, individual investors profited the most, but institutions who own 27% stock also stood to gain from the increase.

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

View our latest analysis for SOPHiA GENETICS

What Does The Institutional Ownership Tell Us About SOPHiA GENETICS?

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 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. 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 SOPHiA GENETICS, (below). Of course, keep in mind that there are other factors to consider, too.

SOPHiA GENETICS is not owned by hedge funds. Alychlo NV is currently the company's largest shareholder with 10% of shares outstanding. Generation Investment Management LLP is the second largest shareholder owning 10% of common stock, and Balderton Capital (UK) LLP holds about 5.0% of the company stock. In addition, we found that Jurgi Camblong, the CEO has 4.0% of the shares allocated to their name.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where 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 SOPHiA GENETICS

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

We can see that insiders own shares in SOPHiA GENETICS SA. As individuals, the insiders collectively own US$13m worth of the US$204m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public -- including retail investors -- own 51% of SOPHiA GENETICS. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Equity Ownership

Private equity firms hold a 15% 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with SOPHiA GENETICS , and understanding them should be part of your investment process.

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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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.