U.S. Markets open in 9 hrs 28 mins
  • S&P Futures

    4,250.00
    +4.25 (+0.10%)
     
  • Dow Futures

    34,492.00
    +30.00 (+0.09%)
     
  • Nasdaq Futures

    14,021.00
    +26.75 (+0.19%)
     
  • Russell 2000 Futures

    2,335.90
    +2.00 (+0.09%)
     
  • Crude Oil

    71.23
    +0.32 (+0.45%)
     
  • Gold

    1,866.80
    -12.80 (-0.68%)
     
  • Silver

    27.92
    -0.22 (-0.79%)
     
  • EUR/USD

    1.2104
    -0.0003 (-0.0242%)
     
  • 10-Yr Bond

    1.4620
    +0.0030 (+0.21%)
     
  • Vix

    15.65
    -0.45 (-2.80%)
     
  • GBP/USD

    1.4111
    -0.0006 (-0.0409%)
     
  • USD/JPY

    109.7760
    +0.1410 (+0.1286%)
     
  • BTC-USD

    38,958.58
    +4,052.02 (+11.61%)
     
  • CMC Crypto 200

    972.18
    +30.37 (+3.22%)
     
  • FTSE 100

    7,134.06
    +45.88 (+0.65%)
     
  • Nikkei 225

    29,126.01
    +177.28 (+0.61%)
     

What You Need To Know About HCI Group, Inc.'s (NYSE:HCI) Investor Composition

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

The big shareholder groups in HCI Group, Inc. (NYSE:HCI) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

HCI Group is not a large company by global standards. It has a market capitalization of US$628m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about HCI Group.

Check out our latest analysis for HCI Group

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About HCI Group?

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.

We can see that HCI Group 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. 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 HCI Group's earnings history below. Of course, the future is what really matters.

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

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in HCI Group. BlackRock, Inc. is currently the company's largest shareholder with 12% of shares outstanding. For context, the second largest shareholder holds about 9.7% of the shares outstanding, followed by an ownership of 5.6% by the third-largest shareholder. Pareshbhai Patel, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 11 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of HCI Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our information suggests that insiders maintain a significant holding in HCI Group, Inc.. Insiders own US$151m worth of shares in the US$628m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, with a 21% stake in the company, will not easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for HCI Group you should be aware of, and 1 of them is concerning.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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.