In This Article:
Key Insights
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Given the large stake in the stock by institutions, Saga's stock price might be vulnerable to their trading decisions
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50% of the business is held by the top 6 shareholders
To get a sense of who is truly in control of Saga plc (LON:SAGA), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's delve deeper into each type of owner of Saga, beginning with the chart below.
Check out our latest analysis for Saga
What Does The Institutional Ownership Tell Us About Saga?
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.
We can see that Saga does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Saga, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Saga. Roger De Haan is currently the company's largest shareholder with 26% of shares outstanding. With 7.1% and 6.4% of the shares outstanding respectively, Eldose Babu and Saga Plc., Employee Stock Ownership Plan are the second and third largest shareholders.
On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.