Key Insights

• The considerable ownership by individual investors in SOPHiA GENETICS indicates that they collectively have a greater say in management and business strategy
• 50% of the business is held by the top 9 shareholders

To get a sense of who is truly in control of SOPHiA GENETICS SA (NASDAQ:SOPH), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of individual investors took a hit after last week’s 11% price drop, institutions with their 31% holdings also suffered.

Let's delve deeper into each type of owner of SOPHiA GENETICS, beginning with the chart below.

What Does The Institutional Ownership Tell Us About SOPHiA GENETICS?

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.

We can see that SOPHiA GENETICS does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 SOPHiA GENETICS' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in SOPHiA GENETICS. The company's largest shareholder is Alychlo NV, with ownership of 10%. With 10% and 8.1% of the shares outstanding respectively, Generation Investment Management LLP and aMoon Ventures Y.SH. Ltd are the second and third largest shareholders. In addition, we found that Jurgi Camblong, the CEO has 3.9% of the shares allocated to their name.

We did some more digging and found that 9 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of SOPHiA GENETICS

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our most recent data indicates that insiders own some shares in SOPHiA GENETICS SA. It has a market capitalization of just US$339m, and insiders have US$22m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 44% stake in SOPHiA GENETICS. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 18%, private equity firms could influence the SOPHiA GENETICS board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand SOPHiA GENETICS better, we need to consider many other factors.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

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.