HMC Capital Limited's (ASX:HMC) market cap surged AU$136m last week, retail investors who have a lot riding on the company were rewarded

In This Article:

Key Insights

  • The considerable ownership by retail investors in HMC Capital indicates that they collectively have a greater say in management and business strategy

  • A total of 16 investors have a majority stake in the company with 50% ownership

  • Institutions own 21% of HMC Capital

To get a sense of who is truly in control of HMC Capital Limited (ASX:HMC), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 46% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, retail investors were the biggest beneficiaries of last week’s 4.4% gain.

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

Check out our latest analysis for HMC Capital

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About HMC Capital?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in HMC Capital. 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 HMC Capital, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
earnings-and-revenue-growth

HMC Capital is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Home Investment Consortium Trust with 16% of shares outstanding. Home Investment Consortium Company Pty Ltd is the second largest shareholder owning 7.6% of common stock, and Cooper Investors Pty Limited holds about 5.1% of the company stock. Furthermore, CEO David Di Pilla is the owner of 2.3% of the company's shares.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 16 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.