The 13% loss of Clover Health Investments, Corp. (NASDAQ:CLOV) last week affected both individual investors who hold 45% as well as institutions

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If you want to know who actually controls Clover Health Investments, Corp. (NASDAQ:CLOV), you will then need to examine the composition of its share register. With a 45% stake, individual investors own the most shares in the company. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).

While institutions that hold 26% have been under pressure after the market capitalization fell to $654 million last week, individual investors suffered the most losses.

Let’s take a closer look at what different types of shareholders can tell us about Clover Health Investments.

Check out our latest analysis for Clover Health Investments

distribution of property

What does institutional ownership tell us about Clover Health’s investments?

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.

Clover Health Investments already has institutions on the stock register. Indeed, they hold a respectable stake in the company. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Clover Health Investments historical earnings and revenue below, but keep in mind there’s always more to tell.

earnings-and-revenue-growth

earnings-and-revenue-growth

We note that hedge funds have no significant investment in Clover Health Investments. With an 18% stake, CEO Vivek Garipalli is the largest shareholder. For context, the second shareholder owns approximately 6.7% of the outstanding shares, followed by a 6.5% ownership by the third shareholder.

Looking at the shareholder register, we can see that 50% of the ownership is controlled by the 21 major shareholders, which means that no shareholder has a controlling interest in the ownership.

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 a stock’s expected performance. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.

Insider ownership of Clover Health Investments

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Insiders appear to hold a large share of Clover Health Investments, Corp. Insiders hold $148 million worth of stock in the $654 million company. It’s great to see insiders so invested in the company. It might be worth checking to see if these insiders have bought recently.

General public property

The general public, who are typically individual investors, hold a 45% stake in Clover Health Investments. While that size of ownership might not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.

Private equity ownership

With a 6.5% stake, private equity firms are able to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, as private equity is sometimes able to encourage strategies that help the market see the value of the company. Alternatively, these holders could exit the investment after making it public.

Next steps:

I find it very interesting to see who exactly owns a company. But to really get insight, we also need to consider other information. For example, we have identified 4 warning signs for Clover Health Investments of which you should be aware.

But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month the financial statements are dated. This may not be consistent with the annual report figures for the full year.

Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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