private equity firms who own 47% along with institutions invested in Alignment Healthcare, Inc. (NASDAQ:ALHC) saw increase in their holdings value last week
If you want to know who really controls Alignment Healthcare, Inc. (NASDAQ:ALHC), then you’ll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private equity firms with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Following a 12% increase in the stock price last week, private equity firms profited the most, but institutions who own 34% stock also stood to gain from the increase.
Let’s take a closer look to see what the different types of shareholders can tell us about Alignment Healthcare.
If you’re not interested in researching ALHC’s ownership structure, we have a free list of interesting investing ideas to potentially inspire your next investment!
What Does The Institutional Ownership Tell Us About Alignment 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.
Alignment Healthcare already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Alignment Healthcare, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don’t have a meaningful investment in Alignment Healthcare. Looking at our data, we can see that the largest shareholder is General Atlantic Service Company, L.P. with 36% of shares outstanding. Warburg Pincus LLC is the second largest shareholder owning 11% of common stock, and FMR LLC holds about 9.0% of the company stock. Additionally, the company’s CEO John Kao directly holds 1.5% of the total shares outstanding.
After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence the company’s decisions.
Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Alignment Healthcare
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.
We can see that insiders own shares in Alignment Healthcare, Inc.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$178m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 13% stake in Alignment Healthcare. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
Private equity firms hold a 47% stake in Alignment Healthcare. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example – Alignment Healthcare has 2 warning signs we think 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.
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