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Key Insights

• Given the large stake in the stock by institutions, Michelmersh Brick Holdings' stock price might be vulnerable to their trading decisions

• 52% of the business is held by the top 7 shareholders

• Insiders have bought recently

A look at the shareholders of Michelmersh Brick Holdings plc (LON:MBH) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 53% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

In the chart below, we zoom in on the different ownership groups of Michelmersh Brick Holdings.

Check out our latest analysis for Michelmersh Brick Holdings

What Does The Institutional Ownership Tell Us About Michelmersh Brick Holdings?

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 Michelmersh Brick Holdings does have institutional investors; and they hold a good portion of the company's stock. 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 Michelmersh Brick Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Michelmersh Brick Holdings. Eric Gadsden is currently the largest shareholder, with 25% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.5% and 4.5%, of the shares outstanding, respectively.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.