Institutions own 40% of Invesco Mortgage Capital Inc. (NYSE:IVR) shares but individual investors control 60% of the company
Key Insights
The considerable ownership by individual investors in Invesco Mortgage Capital indicates that they collectively have a greater say in management and business strategy
The top 25 shareholders own 34% of the company
If you want to know who really controls Invesco Mortgage Capital Inc. (NYSE:IVR), then you'll have to look at the makeup of its share registry. With 60% stake, individual investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Institutions, on the other hand, account for 40% of the company's stockholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.
Let's delve deeper into each type of owner of Invesco Mortgage Capital, beginning with the chart below.
Check out our latest analysis for Invesco Mortgage Capital
What Does The Institutional Ownership Tell Us About Invesco Mortgage Capital?
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.
As you can see, institutional investors have a fair amount of stake in Invesco Mortgage Capital. 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 Invesco Mortgage Capital's earnings history below. Of course, the future is what really matters.
Invesco Mortgage Capital is not owned by hedge funds. BlackRock, Inc. is currently the company's largest shareholder with 9.6% of shares outstanding. For context, the second largest shareholder holds about 4.9% of the shares outstanding, followed by an ownership of 2.1% by the third-largest shareholder.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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 Invesco Mortgage Capital
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 information suggests that Invesco Mortgage Capital Inc. insiders own under 1% of the company. It appears that the board holds about US$1.2m worth of stock. This compares to a market capitalization of US$423m. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 60% stake in Invesco Mortgage Capital, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Next Steps:
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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Invesco Mortgage Capital , and understanding them should be part of your investment process.
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.
