Painful week for individual investors invested in SelectQuote, Inc. (NYSE:SLQT) after 19% drop, institutions also suffered losses

Key Insights

• SelectQuote's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 47% ownership
• 37% of SelectQuote is held by Institutions

A look at the shareholders of SelectQuote, Inc. (NYSE:SLQT) can tell us which group is most powerful. The group holding the most number of shares in the company, around 45% 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).

While institutions who own 37% came under pressure after market cap dropped to US$621m last week,individual investors took the most losses.

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

View our latest analysis for SelectQuote

What Does The Institutional Ownership Tell Us About SelectQuote?

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.

SelectQuote already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 SelectQuote, (below). Of course, keep in mind that there are other factors to consider, too.

SelectQuote is not owned by hedge funds. Brookside Equity Partners LLC is currently the company's largest shareholder with 9.3% of shares outstanding. For context, the second largest shareholder holds about 6.0% of the shares outstanding, followed by an ownership of 4.7% by the third-largest shareholder. In addition, we found that Timothy Danker, the CEO has 1.1% of the shares allocated to their name.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of SelectQuote

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.

Our most recent data indicates that insiders own some shares in SelectQuote, Inc.. As individuals, the insiders collectively own US$55m worth of the US$621m 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

With a 45% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SelectQuote. 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.

Private Equity Ownership

With an ownership of 9.3%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand SelectQuote better, we need to consider many other factors. Be aware that SelectQuote is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com