Yahoo Finance With 57% ownership, IES Holdings, Inc. (NASDAQ:IESC) boasts of strong hedge funds backing
Key Insights
Given the large stake in the stock by institutions, IES Holdings' stock price might be vulnerable to their trading decisions
The largest shareholder of the company is Tontine Capital Management LLC with a 57% stake
Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
A look at the shareholders of IES Holdings, Inc. (NASDAQ:IESC) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are hedge funds with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Since hedge funds have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.
Let's take a closer look to see what the different types of shareholders can tell us about IES Holdings.
Check out our latest analysis for IES Holdings
What Does The Institutional Ownership Tell Us About IES Holdings?
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.
As you can see, institutional investors have a fair amount of stake in IES Holdings. 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 IES Holdings' earnings history below. Of course, the future is what really matters.
It looks like hedge funds own 57% of IES Holdings shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Looking at our data, we can see that the largest shareholder is Tontine Capital Management LLC with 57% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 4.7% of the shares outstanding, followed by an ownership of 3.5% by the third-largest shareholder. Furthermore, CEO Jeffrey Gendell is the owner of 0.7% of the company's shares.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of IES Holdings
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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
We can report that insiders do own shares in IES Holdings, Inc.. As individuals, the insiders collectively own US$24m worth of the US$871m company. 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-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - IES Holdings has 2 warning signs we think you should be aware of.
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
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.
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