In This Article:
Key Insights
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Significant control over Yellow Cake by retail investors implies that the general public has more power to influence management and governance-related decisions
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A total of 25 investors have a majority stake in the company with 48% ownership
If you want to know who really controls Yellow Cake plc (LON:YCA), 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 50% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While institutions who own 38% came under pressure after market cap dropped to UK£1.1b last week,retail investors took the most losses.
Let's delve deeper into each type of owner of Yellow Cake, beginning with the chart below.
See our latest analysis for Yellow Cake
What Does The Institutional Ownership Tell Us About Yellow Cake?
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.
Yellow Cake already has institutions on the share registry. Indeed, they own a respectable stake in 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. 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 Yellow Cake's earnings history below. Of course, the future is what really matters.
It would appear that 9.1% of Yellow Cake shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Our data shows that MM Asset Management Inc is the largest shareholder with 9.1% of shares outstanding. For context, the second largest shareholder holds about 4.8% of the shares outstanding, followed by an ownership of 4.3% by the third-largest shareholder.
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.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.