Institutional investors in Howden Joinery Group Plc (LON:HWDN) see UK£148m decrease in market cap last week, although long-term gains have benefitted them.
Key Insights
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Given the large stake in the stock by institutions, Howden Joinery Group’s stock price might be vulnerable to their trading decisions
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A total of 19 investors have a majority stake in the company with 51% ownership
Every investor in Howden Joinery Group Plc (LON:HWDN) should be aware of the most powerful shareholder groups. With 88% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 4.1% last week. Still, the 31% one-year gains may have helped mitigate their overall losses. But they would probably be wary of future losses.
In the chart below, we zoom in on the different ownership groups of Howden Joinery Group.
View our latest analysis for Howden Joinery Group
What Does The Institutional Ownership Tell Us About Howden Joinery Group?
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.
We can see that Howden Joinery Group does have institutional investors; and they hold a good portion of the company’s stock. 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 Howden Joinery Group’s earnings history below. Of course, the future is what really matters.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don’t have many shares in Howden Joinery Group. Our data shows that BlackRock, Inc. is the largest shareholder with 4.4% of shares outstanding. With 4.4% and 4.3% of the shares outstanding respectively, The Vanguard Group, Inc. and Baillie Gifford & Co. are the second and third largest shareholders.
Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 19 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Howden Joinery Group
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 data suggests that insiders own under 1% of Howden Joinery Group Plc in their own names. It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own UK£8.6m worth of shares. 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
With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Howden Joinery Group. 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.
Next Steps:
It’s always worth thinking about the different groups who own shares in a company. But to understand Howden Joinery Group better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we’ve spotted with Howden Joinery Group (including 1 which is potentially serious) .
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.
