Yahoo Finance Public companies among New Hope Corporation Limited's (ASX:NHC) largest stockholders and were hit after last week's 10% price drop
Key Insights
The considerable ownership by public companies in New Hope indicates that they collectively have a greater say in management and business strategy
A total of 4 investors have a majority stake in the company with 50% ownership
To get a sense of who is truly in control of New Hope Corporation Limited (ASX:NHC), it is important to understand the ownership structure of the business. With 39% stake, public companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And following last week's 10% decline in share price, public companies suffered the most losses.
Let's take a closer look to see what the different types of shareholders can tell us about New Hope.
See our latest analysis for New Hope
What Does The Institutional Ownership Tell Us About New Hope?
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.
As you can see, institutional investors have a fair amount of stake in New Hope. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of New Hope, (below). Of course, keep in mind that there are other factors to consider, too.
New Hope is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Washington H. Soul Pattinson and Company Limited with 39% of shares outstanding. JPMorgan Chase & Co, Brokerage and Securities Investments is the second largest shareholder owning 5.5% of common stock, and The Vanguard Group, Inc. holds about 2.9% of the company stock.
On looking further, we found that 50% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
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 New Hope
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.
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.
We can see that insiders own shares in New Hope Corporation Limited. The insiders have a meaningful stake worth AU$58m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.
General Public Ownership
With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over New Hope. 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.
Public Company Ownership
We can see that public companies hold 39% of the New Hope shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for New Hope (1 is a bit concerning) that you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
