With 69% ownership of the shares, PennyMac Mortgage Investment Trust (NYSE:PMT) is heavily dominated by institutional owners
Key Insights
Institutions' substantial holdings in PennyMac Mortgage Investment Trust implies that they have significant influence over the company's share price
51% of the business is held by the top 11 shareholders
To get a sense of who is truly in control of PennyMac Mortgage Investment Trust (NYSE:PMT), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 69% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
In the chart below, we zoom in on the different ownership groups of PennyMac Mortgage Investment Trust.
Check out our latest analysis for PennyMac Mortgage Investment Trust
What Does The Institutional Ownership Tell Us About PennyMac Mortgage Investment Trust?
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.
PennyMac Mortgage Investment Trust 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 PennyMac Mortgage Investment Trust's earnings history below. Of course, the future is what really matters.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in PennyMac Mortgage Investment Trust. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 17% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 7.2% of the stock.
A closer look at our ownership figures suggests that the top 11 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of PennyMac Mortgage Investment Trust
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 PennyMac Mortgage Investment Trust in their own names. Keep in mind that it's a big company, and the insiders own US$13m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.
General Public Ownership
With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over PennyMac Mortgage Investment Trust. 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 PennyMac Mortgage Investment Trust better, we need to consider many other factors. For example, we've discovered 3 warning signs for PennyMac Mortgage Investment Trust (1 doesn't sit too well with us!) that you should be aware of before investing here.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
