While institutions invested in American Well Corporation (NYSE:AMWL) benefited from last week's 14% gain, individual investors stood to gain the most

Key Insights

• The considerable ownership by individual investors in American Well indicates that they collectively have a greater say in management and business strategy
• A total of 18 investors have a majority stake in the company with 50% ownership
• Insiders have been selling lately

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

If you want to know who really controls American Well Corporation (NYSE:AMWL), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While individual investors were the group that benefitted the most from last week’s US$14m market cap gain, institutions too had a 34% share in those profits.

In the chart below, we zoom in on the different ownership groups of American Well.

See our latest analysis for American Well

What Does The Institutional Ownership Tell Us About American Well?

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.

American Well already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 American Well's earnings history below. Of course, the future is what really matters.

Our data indicates that hedge funds own 8.3% of American Well. 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. Looking at our data, we can see that the largest shareholder is Senvest Management, LLC with 8.3% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.8% and 5.4% of the stock. Furthermore, CEO Ido Schoenberg is the owner of 4.8% of the company's shares.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 18 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of American Well

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of American Well Corporation. Insiders have a US$14m stake in this US$112m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 44% ownership, the general public, mostly comprising of individual investors, have some degree of sway over American Well. 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.

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. Take risks for example - American Well has 2 warning signs we think you should be aware of.

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.