Key Insights

• SelectQuote's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 47% of the business is held by the top 25 shareholders
• Institutions own 37% of SelectQuote

If you want to know who really controls SelectQuote, Inc. (NYSE:SLQT), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 45% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 18% decrease in the stock price last week, retail investors suffered the most losses, but institutions who own 37% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about SelectQuote.

What Does The Institutional Ownership Tell Us About SelectQuote?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

SelectQuote already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 SelectQuote's earnings history below. Of course, the future is what really matters.

SelectQuote is not owned by hedge funds. The company's largest shareholder is Brookside Equity Partners LLC, with ownership of 9.3%. With 6.0% and 4.7% of the shares outstanding respectively, BlackRock, Inc. and Abrams Bison Investments, L.L.C. are the second and third largest shareholders. Furthermore, CEO Timothy Danker is the owner of 1.1% of the company's shares.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of SelectQuote

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.

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 SelectQuote, Inc.. It has a market capitalization of just US$560m, and insiders have US$50m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 45% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SelectQuote. 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

Private equity firms hold a 9.3% stake in SelectQuote. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for SelectQuote (of which 1 is concerning!) you should know about.

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.

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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.

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