Is the shareholding of Sonova Holding AG (VTX: SOON) biased in favor of insiders?
If you want to know who actually controls Sonova Holding AG (VTX: SOON), then you will have to look at the composition of its share register. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. I like to see at least a little insider ownership. As Charlie Munger said ‘Show me the incentive and I’ll show you the result.
Sonova Holding has a market capitalization of 24 billion francs, so it’s too big to go unnoticed. We expect institutions and retail investors to own a portion of the company. Our analysis of company ownership, below, shows that institutions are visible on the share register. Let’s take a closer look at what different types of shareholders can tell us about Sonova Holding.
Check out our latest analysis for Sonova Holding
What does institutional ownership tell us about Sonova Holding?
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 businesses to have some institutions listed, especially if they are growing.
Sonova Holding already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This suggests some credibility among professional investors. But we cannot rely on this fact alone because institutions sometimes make bad investments, like everyone else. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell stocks quickly. This risk is higher in a company without a history of growth. You can see Sonova Holding’s historical earnings and earnings below, but keep in mind that there is always more to tell.
We note that the hedge funds do not have a significant investment in Sonova Holding. Beda Diethelm is currently the largest shareholder of the company with 11% of the shares outstanding. In comparison, the second and third shareholders hold around 5.8% and 5.3% of the capital.
Our studies suggest that the top 25 shareholders collectively control less than half of the company’s shares, which means that the company’s shares are widely disseminated and there is no dominant shareholder.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. There are a reasonable number of analysts covering the stock, so it can be helpful to know their overall vision for the future.
Insider ownership of Sonova Holding
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board of directors.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders have a significant stake in Sonova Holding AG. Insiders own CHF 3.9 billion of shares in the CHF 24 billion company. It is quite significant. Most would be happy to see the board invest alongside them. You may want to access this free chart showing recent insider trades.
General public property
The general public holds 42% of the capital of Sonova Holding. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.
While it is worth considering the different groups that own a business, there are other factors that are even more important. To do this, you need to know the 2 warning signs we spotted with Sonova Holding.
If you are like me, you might want to ask yourself if this business will grow or shrink. Fortunately, you can check out this free report showing analysts‘ forecasts for its future.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.
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