Great week for eHealth, Inc. (NASDAQ:EHTH) institutional investors after losing 13% over the previous year

Key Insights

• Significantly high institutional ownership implies eHealth's stock price is sensitive to their trading actions
• A total of 16 investors have a majority stake in the company with 51% ownership
• Insiders have been selling lately

To get a sense of who is truly in control of eHealth, Inc. (NASDAQ:EHTH), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 39% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutional investors would appreciate the 40% increase in share price last week, given their one-year losses have totalled a disappointing 13%.

Let's take a closer look to see what the different types of shareholders can tell us about eHealth.

See our latest analysis for eHealth

What Does The Institutional Ownership Tell Us About eHealth?

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 eHealth 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see eHealth's historic earnings and revenue below, but keep in mind there's always more to the story.

It looks like hedge funds own 22% of eHealth shares. 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. Our data shows that 8 Knots Management, LLC is the largest shareholder with 8.1% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.9% and 6.5% of the stock. Furthermore, CEO Francis Soistman is the owner of 1.9% of the company's shares.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 16 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of eHealth

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

Shareholders would probably be interested to learn that insiders own shares in eHealth, Inc.. As individuals, the insiders collectively own US$8.1m worth of the US$162m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in eHealth. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand eHealth better, we need to consider many other factors. Be aware that eHealth is showing 4 warning signs in our investment analysis , you should know about...

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.