Canada markets closed
  • S&P/TSX

    19,078.64
    -144.10 (-0.75%)
     
  • S&P 500

    3,818.83
    -2.72 (-0.07%)
     
  • DOW

    31,029.31
    +82.32 (+0.27%)
     
  • CAD/USD

    0.7757
    -0.0011 (-0.14%)
     
  • CRUDE OIL

    109.40
    -2.36 (-2.11%)
     
  • BTC-CAD

    26,062.27
    -223.65 (-0.85%)
     
  • CMC Crypto 200

    436.32
    -3.34 (-0.76%)
     
  • GOLD FUTURES

    1,819.60
    -1.60 (-0.09%)
     
  • RUSSELL 2000

    1,713.34
    -25.50 (-1.47%)
     
  • 10-Yr Bond

    3.0930
    -0.1130 (-3.52%)
     
  • NASDAQ

    11,177.89
    -3.65 (-0.03%)
     
  • VOLATILITY

    28.33
    -0.03 (-0.11%)
     
  • FTSE

    7,312.32
    -11.09 (-0.15%)
     
  • NIKKEI 225

    26,804.60
    -244.87 (-0.91%)
     
  • CAD/EUR

    0.7424
    +0.0088 (+1.20%)
     

What Kind Of Shareholders Hold The Majority In Cardinal Health, Inc.'s (NYSE:CAH) Shares?

  • Oops!
    Something went wrong.
    Please try again later.
·4 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

If you want to know who really controls Cardinal Health, Inc. (NYSE:CAH), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

Cardinal Health has a market capitalization of US$16b, so it's too big to fly under the radar. We'd expect to see both institutions and retail investors owning a portion of the company. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Cardinal Health.

See our latest analysis for Cardinal Health

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Cardinal Health?

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 Cardinal Health 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 Cardinal Health's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
earnings-and-revenue-growth

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Cardinal Health. The Vanguard Group, Inc. is currently the largest shareholder, with 12% of shares outstanding. For context, the second largest shareholder holds about 8.5% of the shares outstanding, followed by an ownership of 8.0% by the third-largest shareholder.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 15 shareholders, meaning that no single shareholder has a majority interest in the ownership.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Cardinal Health

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that Cardinal Health, Inc. insiders own under 1% of the company. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own US$37m of stock. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Cardinal Health. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Cardinal Health (at least 2 which are concerning) , and understanding them should be part of your investment process.

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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting