A look at the shareholders of LendInvest plc (LON: LINV) can tell us which group is most powerful.Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.
LendInvest is not a large company by global standards. It has a market capitalization of UK£206m, which means it wouldn't have the attention of many institutional investors.Taking a look at our data on the ownership groups (below), it seems thatinstitutions own shares in the company.We can zoom in on the different ownership groups, to learn more about LendInvest.
What Does The Institutional Ownership Tell Us About LendInvest?
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.
As you can see, institutional investors have a fair amount of stake in LendInvest.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.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 LendInvest's earnings history below. Of course, the future is what really matters.
AIM:LINV Earnings and Revenue Growth July 21st 2022
We note that hedge funds don't have a meaningful investment in LendInvest.Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In LendInvest's case, its Top Key Executive, Ian Thomas, is the largest shareholder, holding 29% of shares outstanding.In comparison, the second and third largest shareholders hold about 29% and 12% of the stock.Interestingly, the second-largest shareholder, Christian Faes is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.Furthermore, CEO Roderick Lockhart is the owner of 2.1% of the company's shares.
To make our study more interesting, we found that the top 2 shareholders have majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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 LendInvest
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders.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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions, too much power is concentrated within this group.
Our most recent data indicates that insiders own the majority of LendInvest plc. This means they can collectively make decisions for the company.Given it has a market cap of UK£206m, that means they have UK£125m worth of shares.Most would be pleased to see the board is investing alongside them. You may wish to discover(for free) if they have been buying or selling.
General Public Ownership
The general public holds 7.9% stake in LendInvest, which represents a relatively small class of owners.We'd generally expect to see a higher level of ownership by the general public, than this. It's not too concerning, but it is worth noting that retail investors might struggle to influence board decisions.
Private Equity Ownership
With an ownership of 12%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation.Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
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.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.
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