Following a 48% decline over last year, recent gains may please Lifetime Brands, Inc. (NASDAQ:LCUT) institutional owners
Key Insights
Institutions' substantial holdings in Lifetime Brands implies that they have significant influence over the company's share price
The top 7 shareholders own 53% of the company
To get a sense of who is truly in control of Lifetime Brands, Inc. (NASDAQ:LCUT), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 39% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Last week's US$12m market cap gain would probably be appreciated by institutional investors, especially after a year of 48% losses.
Let's delve deeper into each type of owner of Lifetime Brands, beginning with the chart below.
Check out our latest analysis for Lifetime Brands
What Does The Institutional Ownership Tell Us About Lifetime Brands?
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.
We can see that Lifetime Brands does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Lifetime Brands' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Lifetime Brands. The company's largest shareholder is Taylor Parent, LLC, with ownership of 26%. With 6.1% and 5.6% of the shares outstanding respectively, Dimensional Fund Advisors LP and Mill Road Capital Management LLC are the second and third largest shareholders. Additionally, the company's CEO Robert Kay directly holds 2.3% of the total shares outstanding.
We did some more digging and found that 7 of the top shareholders account for roughly 53% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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 Lifetime Brands
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
It seems insiders own a significant proportion of Lifetime Brands, Inc.. Insiders have a US$17m stake in this US$120m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 16% stake in the company, and hence can't easily be ignored. 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
With a stake of 5.6%, private equity firms could influence the Lifetime Brands board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Private Company Ownership
Our data indicates that Private Companies hold 26%, of the company's shares. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Lifetime Brands better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Lifetime Brands (including 1 which is significant) .
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.
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.
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