After the recent decline, Harvey Norman Holdings Limited (ASX:HVN) Top Key Executive Gerald Harvey's holdings have lost 4.8% of their value

editorial-team@simplywallst.com (Simply Wall St)

Sun, Oct 27, 2024, 5:05 PM 4 min read

If you want to know who really controls Harvey Norman Holdings Limited (ASX:HVN), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders as a group endured the highest losses after market cap fell by AU$287m.

Let's take a closer look to see what the different types of shareholders can tell us about Harvey Norman Holdings.

View our latest analysis for Harvey Norman Holdings

ownership-breakdown — ASX:HVN Ownership Breakdown October 27th 2024

What Does The Institutional Ownership Tell Us About Harvey Norman Holdings?

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.

Harvey Norman Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Harvey Norman Holdings' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — ASX:HVN Earnings and Revenue Growth October 27th 2024

We note that hedge funds don't have a meaningful investment in Harvey Norman Holdings. Our data suggests that Gerald Harvey, who is also the company's Top Key Executive, holds the most number of shares at 36%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. With 16% and 3.0% of the shares outstanding respectively, Dimbulu Pty Ltd and The Vanguard Group, Inc. are the second and third largest shareholders. Additionally, the company's CEO Kay Lesley Page directly holds 1.6% of the total shares outstanding.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Harvey Norman Holdings

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Our most recent data indicates that insiders own a reasonable proportion of Harvey Norman Holdings Limited. It is very interesting to see that insiders have a meaningful AU$2.3b stake in this AU$5.7b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Harvey Norman 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 Company Ownership

It seems that Private Companies own 18%, of the Harvey Norman Holdings stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Harvey Norman Holdings , and understanding them should be part of your investment process.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.