Every investor in New Hope Corporation Limited (ASX:NHC) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are public companies with 39% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And following last week's 7.7% decline in share price, public companies suffered the most losses.
Let's delve deeper into each type of owner of New Hope, beginning with the chart below.
What Does The Institutional Ownership Tell Us About New Hope?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see New Hope's historic earnings and revenue below, but keep in mind there's always more to the story.
ASX:NHC Earnings and Revenue Growth February 13th 2025
Hedge funds don't have many shares in New Hope. Washington H. Soul Pattinson and Company Limited is currently the company's largest shareholder with 39% of shares outstanding. JPMorgan Chase & Co, Brokerage and Securities Investments is the second largest shareholder owning 4.2% of common stock, and The Vanguard Group, Inc. holds about 3.8% of the company stock.
On looking further, we found that 51% 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.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of New Hope
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
We can report that insiders do own shares in New Hope Corporation Limited. This is a big company, so it is good to see this level of alignment. Insiders own AU$57m worth of shares (at current prices). 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
The general public-- including retail investors -- own 37% stake in the company, and hence can't easily be ignored. 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
Public companies currently own 39% of New Hope stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand New Hope better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with New Hope .
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.
