NYSE:TEVA) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership.” data-reactid=”28″>Every investor in Teva Pharmaceutical Industries Limited (NYSE:TEVA) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that have been privatized tend to have low insider ownership.
With a market capitalization of US$13b, Teva Pharmaceutical Industries is rather large. We’d expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholder can tell us about Teva Pharmaceutical Industries.
View our latest analysis for Teva Pharmaceutical Industries ” data-reactid=”30″>View our latest analysis for Teva Pharmaceutical Industries
What Does The Institutional Ownership Tell Us About Teva Pharmaceutical Industries?
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 companies to have some institutions on the register, especially if they are growing.
We can see that Teva Pharmaceutical Industries does have institutional investors; and they hold a good portion of the company’s stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Teva Pharmaceutical Industries’s historic earnings and revenue, below, but keep in mind there’s always more to the story.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don’t have many shares in Teva Pharmaceutical Industries. Capital Research and Management Company is currently the largest shareholder, with 16% of shares outstanding. Berkshire Hathaway Inc. is the second largest shareholder owning 3.9% of common stock, and BlackRock, Inc. holds about 3.6% of the company stock.
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 one share holder has a majority.
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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Teva Pharmaceutical Industries
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. 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.
if those insiders have been selling. ” data-reactid=”72″>Our data suggests that insiders own under 1% of Teva Pharmaceutical Industries Limited in their own names. As it is a large company, we’d only expect insiders to own a small percentage of it. But it’s worth noting that they own US$45m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.
General Public Ownership
The general public holds a 44% stake in TEVA. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Public Company Ownership
We can see that public companies hold 3.9%, of the Teva Pharmaceutical Industries shares on issue. It’s hard to say for sure, but this suggests they have entwined business interests. This might be a strategic stake, so it’s worth watching this space for changes in ownership.
Next Steps:
We’ve identified 2 warning signs with Teva Pharmaceutical Industries (at least 1 which is concerning) , and understanding them should be part of your investment process.” data-reactid=”78″>It’s always worth thinking about the different groups who own shares in a company. But to understand Teva Pharmaceutical Industries better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We’ve identified 2 warning signs with Teva Pharmaceutical Industries (at least 1 which is concerning) , and understanding them should be part of your investment process.
this free report showing whether analysts are predicting a brighter future.” data-reactid=”79″>But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”81″>This article by Simply Wall St is general in nature. 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.
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