Private companies who have a significant stake must be disappointed along with institutions after James Halstead plc's (LON:JHD) market cap dropped by UK￡48m
Significant control over James Halstead by private companies implies that the general public has more power to influence management and governance-related decisions
A total of 5 investors have a majority stake in the company with 54% ownership
If you want to know who really controls James Halstead plc (LON:JHD), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 29% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While institutions who own 26% came under pressure after market cap dropped to UK￡715m last week,private companies took the most losses.
Let's delve deeper into each type of owner of James Halstead, beginning with the chart below.
What Does The Institutional Ownership Tell Us About James Halstead?
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 James Halstead. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 James Halstead, (below). Of course, keep in mind that there are other factors to consider, too.
earnings-and-revenue-growth
James Halstead is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is John Halstead Settlement with 24% of shares outstanding. With 12% and 6.5% of the shares outstanding respectively, Mark Halstead and Octopus Investments Limited are the second and third largest shareholders. Mark Halstead, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
Our research also brought to light the fact that roughly 54% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.
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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of James Halstead
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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 information suggests that insiders maintain a significant holding in James Halstead plc. Insiders have a UK￡142m stake in this UK￡715m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 18% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Equity Ownership
With an ownership of 6.5%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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.
Private Company Ownership
It seems that Private Companies own 29%, of the James Halstead stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
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.
