The ownership structure of the healthcare sector, represented by Healthcare Select Sector SPDR (XLV), is mainly dominated by institutional investors such as mutual funds, hedge funds and private equity funds.
The above graph shows Universal Health Services’ (UHS) ownership structure as of December 21, 2014. It’s dominated by passive investors such as institutional advisers, pension funds, the government, and insurance companies. Hedge funds can either be activist or passive investors. Hedge funds account for 9% of the company’s total ownership. Activist investors try to introduce major changes to company operations in order to increase their returns. Passive investors, however, purchase investments for long-term returns and are least involved in the company’s operations.
Vanguard Group, Wellington Management, and T. Rowe Price Associates are the top three investment research firms or mutual funds in the company. Pension funds, government, insurance companies, and other investors like banks, holding companies, and corporations together own about 5.6% of the firm.
Individual investors account for 1.58% of the company’s total ownership structure. Insiders own about 1.56% of the total shares, of which founder Alan B. Miller owns about 1.08%.
Change in ownership
The above graph shows a change in Universal Health Services’ ownership structure, with the share of investment advisors rising from 77.3% in 2011 to 83.8% in 2014. Hedge Fund investment has reduced from 15.8% in 2011 to 9% in 2014. You can attribute this shift to Viking Global Management dropping Universal Health Services from its holdings. Instead, the hedge fund has invested in HCA Holdings (HCA), which is considered a very aggressive stock in the US hospital industry.
Increasing insider investment from 1.11% in December 2011 to 1.56% in December 2014 may indicate growing confidence regarding Universal Health Services’ performance. Community Health Systems (CYH) and Tenet Healthcare (THC) also have passive investors as their majority shareholders.