Erie Indemnity Company's (NASDAQ:ERIE) top holders are insiders and they are likely disappointed by the recent 3.8% drop
Insiders appear to have a vested interest in Erie Indemnity's growth, as seen by their sizeable ownership
The top 2 shareholders own 51% of the company
Every investor in Erie Indemnity Company (NASDAQ:ERIE) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And following last week's 3.8% decline in share price, insiders suffered the most losses.
Let's delve deeper into each type of owner of Erie Indemnity, beginning with the chart below.
Check out our latest analysis for Erie Indemnity
What Does The Institutional Ownership Tell Us About Erie Indemnity?
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 Erie Indemnity 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 Erie Indemnity's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Erie Indemnity. The company's largest shareholder is Thomas Hagen, with ownership of 33%. Elizabeth Ann Vorsheck is the second largest shareholder owning 18% of common stock, and H.O. Hirt Trusts holds about 11% of the company stock.
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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Erie Indemnity
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.
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 Erie Indemnity Company. Insiders own US$4.8b worth of shares in the US$12b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
The general public, who are usually individual investors, hold a 15% stake in Erie Indemnity. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
It seems that Private Companies own 11%, of the Erie Indemnity stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.
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.
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