With 69% ownership of the shares, GE HealthCare Technologies Inc. (NASDAQ:GEHC) is heavily dominated by institutional owners

Key Insights

  • Institutions’ substantial holdings in GE HealthCare Technologies implies that they have significant influence over the company’s share price

  • A total of 10 investors have a majority stake in the company with 50% ownership

  • Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls GE HealthCare Technologies Inc. (NASDAQ:GEHC), then you’ll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 69% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

Let’s delve deeper into each type of owner of GE HealthCare Technologies, beginning with the chart below.

Check out our latest analysis for GE HealthCare Technologies

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What Does The Institutional Ownership Tell Us About GE HealthCare Technologies?

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 GE HealthCare Technologies 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 GE HealthCare Technologies’ earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growthearnings-and-revenue-growth

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Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. GE HealthCare Technologies is not owned by hedge funds. Capital Research and Management Company is currently the company’s largest shareholder with 11% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 10% of common stock, and General Electric Company holds about 6.7% of the company stock.

We did some more digging and found that 10 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 GE HealthCare Technologies

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 data suggests that insiders own under 1% of GE HealthCare Technologies Inc. in their own names. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own US$25m worth of shares (at current prices). 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 24% ownership, the general public, mostly comprising of individual investors, have some degree of sway over GE HealthCare Technologies. 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.

Public Company Ownership

Public companies currently own 6.7% of GE HealthCare Technologies 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 GE HealthCare Technologies better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we’ve spotted 2 warning signs for GE HealthCare Technologies 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.

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

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.

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