Nasdaq
华尔街日报Procter & Gamble Health Limited's (NSE:PGHL) stock price dropped 6.6% last week; public companies would not be happy
Key Insights
- Procter & Gamble Health's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
- The Procter & Gamble Company owns 52% of the company
- Institutional ownership in Procter & Gamble Health is 17%
To get a sense of who is truly in control of Procter & Gamble Health Limited (NSE:PGHL), it is important to understand the ownership structure of the business. With 52% stake, public companies 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).
As market cap fell to ₹91b last week, public companies would have faced the highest losses than any other shareholder groups of the company.
In the chart below, we zoom in on the different ownership groups of Procter & Gamble Health.
See our latest analysis for Procter & Gamble Health
What Does The Institutional Ownership Tell Us About Procter & Gamble Health?
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 Procter & Gamble Health. 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 Procter & Gamble Health's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Procter & Gamble Health. Our data shows that The Procter & Gamble Company is the largest shareholder with 52% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. In comparison, the second and third largest shareholders hold about 4.2% and 2.8% of the stock.
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 Procter & Gamble Health
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
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.
Our information suggests that Procter & Gamble Health Limited insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own ₹32m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Procter & Gamble Health. 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.
Public Company Ownership
It appears to us that public companies own 52% of Procter & Gamble Health. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Procter & Gamble Health that you should be aware of.
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.