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If you want to know who really controls Lancashire Holdings Limited (LON:LRE), then you'll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
Lancashire Holdings has a market capitalization of UK£1.4b, so we would expect some institutional investors to have noticed the stock. In the chart below below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about LRE.
Check out our latest analysis for Lancashire Holdings
What Does The Institutional Ownership Tell Us About Lancashire Holdings?
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.
Lancashire Holdings already has institutions on the share registry. Indeed, they own 75% of the company. 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. 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 Lancashire Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Lancashire Holdings is not owned by hedge funds. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Lancashire Holdings
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.