The considerable ownership by retail investors in Invesco Mortgage Capital indicates that they collectively have a greater say in management and business strategy
35% of the business is held by the top 25 shareholders
If you want to know who really controls Invesco Mortgage Capital Inc. (NYSE:IVR), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 60% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).
And institutions on the other hand have a 40% ownership in the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.
Let's take a closer look to see what the different types of shareholders can tell us about Invesco Mortgage Capital.
What Does The Institutional Ownership Tell Us About Invesco Mortgage Capital?
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.
We can see that Invesco Mortgage Capital 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. 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 Invesco Mortgage Capital's historic earnings and revenue below, but keep in mind there's always more to the story.
NYSE:IVR Earnings and Revenue Growth August 6th 2024
Invesco Mortgage Capital is not owned by hedge funds. BlackRock, Inc. is currently the company's largest shareholder with 10% of shares outstanding. With 5.1% and 2.2% of the shares outstanding respectively, The Vanguard Group, Inc. and Geode Capital Management, LLC are the second and third largest shareholders.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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 Invesco Mortgage Capital
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. 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.
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 less than 1% of Invesco Mortgage Capital Inc.. It appears that the board holds about US$1.5m worth of stock. This compares to a market capitalization of US$434m. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 60% of Invesco Mortgage Capital shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Invesco Mortgage Capital better, we need to consider many other factors. For example, we've discovered 2 warning signs for Invesco Mortgage Capital that you should be aware of before investing here.
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.
