While institutions invested in American Well Corporation (NYSE:AMWL) benefited from last week's 18% gain, retail investors stood to gain the most

Key Insights

• The considerable ownership by retail investors in American Well indicates that they collectively have a greater say in management and business strategy
• The top 15 shareholders own 50% of the company
• Recent sales by insiders

Every investor in American Well Corporation (NYSE:AMWL) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 39% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that benefitted the most from last week’s US$21m market cap gain, institutions too had a 35% share in those profits.

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

View 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.

We can see that American Well does have institutional investors; and they hold a good portion of the company's stock. 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.

It would appear that 14% of American Well shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Senvest Management, LLC is currently the company's largest shareholder with 8.0% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.1% and 5.7%, of the shares outstanding, respectively. In addition, we found that Ido Schoenberg, the CEO has 4.9% of the shares allocated to their name.

A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 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 American Well

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

It seems insiders own a significant proportion of American Well Corporation. Insiders have a US$18m stake in this US$140m 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 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over American Well. 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 American Well better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for American Well you should be aware of, and 1 of them is potentially serious.

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.