Given the large stake in the stock by institutions, Oscar Health's stock price might be vulnerable to their trading decisions
51% of the business is held by the top 8 shareholders
Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
Every investor in Oscar Health, Inc. (NYSE:OSCR) should be aware of the most powerful shareholder groups. With 56% stake, institutions 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).
And as as result, institutional investors reaped the most rewards after the company's stock price gained 18% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 282%.
Let's delve deeper into each type of owner of Oscar Health, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Oscar Health?
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 Oscar 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. 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 Oscar Health's earnings history below. Of course, the future is what really matters.
NYSE:OSCR Earnings and Revenue Growth January 16th 2024
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Oscar Health is not owned by hedge funds. Thrive Capital Management, LLC is currently the largest shareholder, with 17% of shares outstanding. The second and third largest shareholders are The Vanguard Group, Inc. and Alphabet Inc., with an equal amount of shares to their name at 6.3%.
We did some more digging and found that 8 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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 some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Oscar Health
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.
We can report that insiders do own shares in Oscar Health, Inc.. This is a big company, so it is good to see this level of alignment. Insiders own US$66m 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
With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Oscar 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.
Private Equity Ownership
With a stake of 22%, private equity firms could influence the Oscar Health board. 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.
Public Company Ownership
Public companies currently own 6.2% of Oscar Health stock. 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:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Oscar Health , and understanding them should be part of your investment process.
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.
