Key Insights

Regis Healthcare's significant insider ownership suggests inherent interests in company's expansion The top 2 shareholders own 54% of the company 15% of Regis Healthcare is held by Institutions

Every investor in Regis Healthcare Limited (ASX:REG) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

So it follows, every decision made by insiders of Regis Healthcare regarding the company's future would be crucial to them.

In the chart below, we zoom in on the different ownership groups of Regis Healthcare.

See our latest analysis for Regis Healthcare  ownership-breakdown

What Does The Institutional Ownership Tell Us About Regis Healthcare?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Regis Healthcare. 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 Regis Healthcare's historic earnings and revenue below, but keep in mind there's always more to the story. earnings-and-revenue-growth

Hedge funds don't have many shares in Regis Healthcare. Ian Roberts is currently the largest shareholder, with 27% of shares outstanding. For context, the second largest shareholder holds about 27% of the shares outstanding, followed by an ownership of 5.4% 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 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Regis Healthcare

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

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems that insiders own more than half the Regis Healthcare Limited stock. This gives them a lot of power. Given it has a market cap of AU$686m, that means they have AU$385m worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can  click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Regis Healthcare better, we need to consider many other factors. For instance, we've identified  1 warning sign for Regis Healthcare 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.

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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