Barclays PLC (LON:BARC) is largely controlled by institutional shareholders who own 80% of the company

editorial-team@simplywallst.com (Simply Wall St)

Sun, Feb 11, 2024, 11:22 PM 4 min read

Significantly high institutional ownership implies Barclays' stock price is sensitive to their trading actions
A total of 20 investors have a majority stake in the company with 50% ownership
Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Barclays PLC (LON:BARC), 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 institutions with 80% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

In the chart below, we zoom in on the different ownership groups of Barclays.

Check out our latest analysis for Barclays

ownership-breakdown — LSE:BARC Ownership Breakdown February 12th 2024

What Does The Institutional Ownership Tell Us About Barclays?

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 Barclays. 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 Barclays, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — LSE:BARC Earnings and Revenue Growth February 12th 2024

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Barclays. The company's largest shareholder is BlackRock, Inc., with ownership of 8.3%. Meanwhile, the second and third largest shareholders, hold 4.9% and 4.9%, of the shares outstanding, respectively.

A closer look at our ownership figures suggests that the top 20 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Barclays

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

Our most recent data indicates that insiders own less than 1% of Barclays PLC. However, it's possible that insiders might have an indirect interest through a more complex structure. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own UK£18m worth of shares. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 13% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Barclays better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Barclays you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.