Institutions' substantial holdings in Phoenix Group Holdings implies that they have significant influence over the company's share price
51% of the business is held by the top 10 shareholders
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
Every investor in Phoenix Group Holdings plc (LON:PHNX) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 78% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And last week, institutional investors ended up benefitting the most after the company hit UK£5.3b in market cap. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 9.4%.
Let's take a closer look to see what the different types of shareholders can tell us about Phoenix Group Holdings.
What Does The Institutional Ownership Tell Us About Phoenix Group Holdings?
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 have a fair amount of stake in Phoenix Group Holdings. 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. 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 Phoenix Group Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.
LSE:PHNX Earnings and Revenue Growth June 26th 2024
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Phoenix Group Holdings is not owned by hedge funds. MS&AD Insurance Group Holdings, Inc., Asset Management Arm is currently the company's largest shareholder with 15% of shares outstanding. abrdn plc is the second largest shareholder owning 11% of common stock, and BlackRock, Inc. holds about 7.4% of the company stock.
We did some more digging and found that 10 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Phoenix Group Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
Our information suggests that Phoenix Group Holdings plc insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own UK£5.3m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 16% stake in Phoenix Group Holdings. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Equity Ownership
Private equity firms hold a 5.0% stake in Phoenix Group Holdings. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Phoenix Group Holdings has 1 warning sign we think you should be aware of.
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.
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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.
