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If you want to know who really controls New Hope Corporation Limited (ASX:NHC), then you’ll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.
With a market capitalization of AU$3.3b, New Hope is a decent size, so it is probably on the radar of institutional investors. In the chart below below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about NHC.
Check out our latest analysis for New Hope
What Does The Institutional Ownership Tell Us About New Hope?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors own 19% of New Hope. 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. 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 New Hope, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don’t have many shares in New Hope. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of New Hope
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
I can report that insiders do own shares in New Hope Corporation Limited. This is a big company, so it is good to see this level of alignment. Insiders own AU$36m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public holds a 17% stake in NHC. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.