Heritage Insurance Holdings, Inc.'s (NYSE:HRTG) large institutional owners must be happy as stock continues to impress, up 18% over the past week
Key Insights
Institutions' substantial holdings in Heritage Insurance Holdings implies that they have significant influence over the company's share price
The top 14 shareholders own 51% of the company
A look at the shareholders of Heritage Insurance Holdings, Inc. (NYSE:HRTG) can tell us which group is most powerful. The group holding the most number of shares in the company, around 40% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).
And as as result, institutional investors reaped the most rewards after the company's stock price gained 18% last week. The one-year return on investment is currently 25% and last week's gain would have been more than welcomed.
In the chart below, we zoom in on the different ownership groups of Heritage Insurance Holdings.
See our latest analysis for Heritage Insurance Holdings
What Does The Institutional Ownership Tell Us About Heritage Insurance Holdings?
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.
Heritage Insurance Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Heritage Insurance Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
Heritage Insurance Holdings is not owned by hedge funds. Raymond Hyer is currently the company's largest shareholder with 13% of shares outstanding. The second and third largest shareholders are The Vanguard Group, Inc. and Rutabaga Capital Management LLC, with an equal amount of shares to their name at 5.1%. Additionally, the company's CEO Ernesto Garateix directly holds 1.9% of the total shares outstanding.
A closer look at our ownership figures suggests that the top 14 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Heritage Insurance Holdings
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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 Heritage Insurance Holdings, Inc.. Insiders own US$26m worth of shares in the US$102m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 34% stake in the company, and hence can't 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Heritage Insurance Holdings (of which 1 is concerning!) you should know about.
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.
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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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