Individual investors invested in Hennessy Advisors, Inc. (NASDAQ:HNNA) up 11% last week, insiders too were rewarded

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

Sat, Jan 4, 2025, 5:34 AM 4 min read

If you want to know who really controls Hennessy Advisors, Inc. (NASDAQ:HNNA), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that reaped the most benefits after last week’s 11% price gain, insiders also received a 39% cut.

Let's delve deeper into each type of owner of Hennessy Advisors, beginning with the chart below.

Check out our latest analysis for Hennessy Advisors

ownership-breakdown — NasdaqGM:HNNA Ownership Breakdown January 4th 2025

What Does The Institutional Ownership Tell Us About Hennessy Advisors?

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.

We can see that Hennessy Advisors 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Hennessy Advisors' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — NasdaqGM:HNNA Earnings and Revenue Growth January 4th 2025

Hennessy Advisors is not owned by hedge funds. The company's CEO Neil Hennessy is the largest shareholder with 26% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 3.3% and 3.2%, of the shares outstanding, respectively.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Hennessy Advisors

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.

It seems insiders own a significant proportion of Hennessy Advisors, Inc.. It has a market capitalization of just US$100m, and insiders have US$39m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 51% stake in Hennessy Advisors, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hennessy Advisors better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Hennessy Advisors (of which 1 is potentially serious!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.