Could the ownership structure of Harrow Health, Inc. (NASDAQ: HROW) tell us anything useful?

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Every investor in Harrow Health, Inc. (NASDAQ: HROW) should know about the most powerful shareholder groups. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. 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.

With a market cap of US $ 221 million, Harrow Health is a small cap stock, so it might be overlooked by many institutional investors. In the graph below, we can see that institutional investors have bought into the company. Let’s dig deeper into each type of owner to find out more about Harrow Health.

Distribution of the NasdaqGM property: HROW June 20, 2021

What does institutional ownership tell us about Harrow Health?

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.

Harrow Health already has institutions listed in the share register. Indeed, they hold a respectable stake in the company. This implies that analysts working for these institutions have reviewed the title and appreciate it. But like everyone else, they could be wrong. If several institutions change their mind about a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out Harrow Health’s earnings history below. Of course, the future is what really matters.

profit and revenue growthNasdaqGM: HROW Profits and Revenue Growth June 20, 2021

It appears that 17% of Harrow Health shares are controlled by hedge funds. This is worth noting, as hedge funds are often quite active investors, who can try to influence management. Many want to see value creation (and a higher stock price) in the short to medium term. The main shareholder of the company is Opaleye Management Inc., with a 12% stake. The second and third largest shareholders are BlackRock, Inc. and Renaissance Technologies Corp., with an equal number of shares in their name at 5.9%. Additionally, CEO Mark Baum owns 5.1% of the company’s shares.

A closer look at our ownership figures suggests that the top 14 shareholders have a combined 50% ownership, implying that no shareholder has a majority.

While it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. While there is some coverage from analysts, the company is probably not widely covered. So he might get more attention, down the track.

Harrow Health Insider Property

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.

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

Our most recent data indicates that insiders own a reasonable proportion of Harrow Health, Inc. Insiders own $ 23 million in shares of the $ 221 million company. This may suggest that the founders still own a lot of shares. You can click here to see if they bought or sold.

General public property

With a 33% stake, the general public has some influence over Harrow Health. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.

Next steps:

It’s always worth thinking about the different groups that own shares in a company. But to understand Harrow Health better, there are many other factors to consider. Consider, for example, the ever-present specter of investment risk. We have identified 5 warning signs with Harrow Health (at least 2 which are significant) , and understanding them should be part of your investment process.

If you are like me, you might want to ask yourself if this business will grow or shrink. Fortunately, you can check 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. 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.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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