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The big shareholder groups in Washington H. Soul Pattinson and Company Limited (ASX:SOL) have power over the company. 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.'
Washington H. Soul Pattinson has a market capitalization of AU$5.3b, so it's too big to fly under the radar. We'd expect to see both institutions and retail investors owning a portion of the company. In the chart below below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about SOL.
What Does The Institutional Ownership Tell Us About Washington H. Soul Pattinson?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Washington H. Soul Pattinson already has institutions on the share registry. Indeed, they own 16% of 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. 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 Washington H. Soul Pattinson's historic earnings and revenue, below, but keep in mind there's always more to the story.
Washington H. Soul Pattinson is not owned by hedge funds. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Washington H. Soul Pattinson
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
I can report that insiders do own shares in Washington H. Soul Pattinson and Company Limited. This is a big company, so it is good to see this level of alignment. Insiders own AU$346m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.
General Public Ownership
With a 35% ownership, the general public have some degree of sway over SOL. 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.
Public Company Ownership
It appears to us that public companies own 39% of SOL. We can't be certain, but this is quite possible this is a strategic stake. The businesses may be similar, or work together.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too.
I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.
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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