With 56% ownership of the shares, InMode Ltd. (NASDAQ:INMD) is heavily dominated by institutional owners
Key Insights
- Significantly high institutional ownership implies InMode’s stock prices are sensitive to their trading actions.
- The top 25 shareholders own 47% of the company
- Insiders own 17% of InMode
A look at the shareholders of InMode Ltd. (NASDAQ:INMD) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
In the chart below, we zoom in on the different ownership groups of InMode.
See our latest analysis for InMode
What Does The Institutional Ownership Tell Us About InMode?
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.
InMode already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 InMode’s earnings history below. Of course, the future is what really matters.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. InMode is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Robert Mulholland with 9.8% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.2% and 3.4%, of the shares outstanding, respectively. Michael Kreindel, who is the second-largest shareholder, also happens to hold the title of Chief Technology Officer. In addition, we found that Moshe Mizrahy, the CEO has 2.4% of the shares allocated to their name.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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 InMode
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
It seems insiders own a significant proportion of InMode Ltd.. It is very interesting to see that insiders have a meaningful US$499m stake in this US$3.0b business. It is good to see this level of investment. 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 27% stake in InMode. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
It’s always worth thinking about the different groups who own shares in a company. But to understand InMode better, we need to consider many other factors. Take risks for example – InMode has 1 warning sign 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.
Valuation is complex, but we’re helping make it simple.
Find out whether InMode is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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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.
