U.S. markets closed
  • S&P Futures

    3,839.50
    +30.25 (+0.79%)
     
  • Dow Futures

    31,125.00
    +213.00 (+0.69%)
     
  • Nasdaq Futures

    13,045.75
    +134.75 (+1.04%)
     
  • Russell 2000 Futures

    2,232.10
    +32.90 (+1.50%)
     
  • Crude Oil

    62.83
    +1.33 (+2.16%)
     
  • Gold

    1,738.50
    +9.70 (+0.56%)
     
  • Silver

    26.82
    +0.38 (+1.42%)
     
  • EUR/USD

    1.2096
    +0.0009 (+0.07%)
     
  • 10-Yr Bond

    1.4600
    -0.0580 (-3.82%)
     
  • Vix

    27.95
    -0.94 (-3.25%)
     
  • GBP/USD

    1.3986
    +0.0064 (+0.46%)
     
  • USD/JPY

    106.5250
    +0.0230 (+0.02%)
     
  • BTC-USD

    46,227.98
    -313.68 (-0.67%)
     
  • CMC Crypto 200

    922.52
    -10.61 (-1.14%)
     
  • FTSE 100

    6,483.43
    -168.53 (-2.53%)
     
  • Nikkei 225

    29,581.57
    +615.56 (+2.13%)
     

Is Freelancer Limited's (ASX:FLN) Shareholder Ownership Skewed Towards Insiders?

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·4 min read
  • Oops!
    Something went wrong.
    Please try again later.

If you want to know who really controls Freelancer Limited (ASX:FLN), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

With a market capitalization of AU$226m, Freelancer is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions don't own many shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Freelancer.

Check out our latest analysis for Freelancer

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Freelancer?

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.

Since institutions own only a small portion of Freelancer, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

earnings-and-revenue-growth
earnings-and-revenue-growth

Freelancer is not owned by hedge funds. The company's CEO Robert Barrie is the largest shareholder with 44% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 36% and 2.3%, of the shares outstanding, respectively. Interestingly, the third-largest shareholder, Darren Nicholas Williams is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Freelancer

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. 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.

It seems that insiders own more than half the Freelancer Limited stock. This gives them a lot of power. That means they own AU$189m worth of shares in the AU$226m company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, with a 15% stake in the company, will not easily be ignored. 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 Freelancer better, we need to consider many other factors. Be aware that Freelancer is showing 1 warning sign in our investment analysis , you should know about...

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.