Significant control over FreightCar America by individual investors implies that the general public has more power to influence management and governance-related decisions
A total of 17 investors have a majority stake in the company with 51% ownership
A look at the shareholders of FreightCar America, Inc. (NASDAQ:RAIL) can tell us which group is most powerful. With 44% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Following a 37% increase in the stock price last week, individual investors profited the most, but institutions who own 30% stock also stood to gain from the increase.
Let's take a closer look to see what the different types of shareholders can tell us about FreightCar America.
NasdaqGS:RAIL Ownership Breakdown August 30th 2024
What Does The Institutional Ownership Tell Us About FreightCar America?
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 FreightCar America. 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. 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 FreightCar America's earnings history below. Of course, the future is what really matters.
NasdaqGS:RAIL Earnings and Revenue Growth August 30th 2024
We note that hedge funds don't have a meaningful investment in FreightCar America. The company's largest shareholder is Fabricaciones y Servicios de México, S.A. de C.V., with ownership of 10%. Continental General Insurance Company, Asset Management Arm is the second largest shareholder owning 8.4% of common stock, and Pacific Investment Management Company LLC holds about 8.2% of the company stock. In addition, we found that Nicholas Randall, the CEO has 0.8% of the shares allocated to their name.
Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 17 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of FreightCar America
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own a reasonable proportion of FreightCar America, Inc.. It has a market capitalization of just US$136m, and insiders have US$19m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
We can see that Private Companies own 12%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for FreightCar America you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this freereport on analyst forecasts.
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.
