Hedge funds investors control 50% of Insight Molecular Diagnostics Inc. (NASDAQ:IMDX) and were rewarded last week after stock increased 11%
Key Insights
- Significantly high institutional ownership implies Insight Molecular Diagnostics' stock price is sensitive to their trading actions
- 51% of the business is held by the top 2 shareholders
- 14% of Insight Molecular Diagnostics is held by insiders
Every investor in Insight Molecular Diagnostics Inc. (NASDAQ:IMDX) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are hedge funds with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And things are looking up for hedge funds investors after the company gained US$15m in market cap last week. One-year return to shareholders is currently 154% and last week’s gain was the icing on the cake.
Let's delve deeper into each type of owner of Insight Molecular Diagnostics, beginning with the chart below.
View our latest analysis for Insight Molecular Diagnostics
What Does The Institutional Ownership Tell Us About Insight Molecular Diagnostics?
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.
As you can see, institutional investors have a fair amount of stake in Insight Molecular Diagnostics. 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. 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 Insight Molecular Diagnostics' earnings history below. Of course, the future is what really matters.
Our data indicates that hedge funds own 50% of Insight Molecular Diagnostics. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Broadwood Capital, Inc. is currently the company's largest shareholder with 40% of shares outstanding. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 9.8% by the third-largest shareholder.
To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Insight Molecular Diagnostics
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Insight Molecular Diagnostics Inc.. It has a market capitalization of just US$155m, and insiders have US$21m worth of shares in their own names. 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
The general public-- including retail investors -- own 20% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
Public companies currently own 9.6% of Insight Molecular Diagnostics stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Insight Molecular Diagnostics better, we need to consider many other factors. For instance, we've identified 6 warning signs for Insight Molecular Diagnostics (3 are significant) that 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.