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How Much Of Nicholas Financial, Inc. (NASDAQ:NICK) Do Institutions Own?

Simply Wall St

If you want to know who really controls Nicholas Financial, Inc. (NASDAQ:NICK), then you'll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. We also tend to see lower insider ownership in companies that were previously publicly owned.

Nicholas Financial is not a large company by global standards. It has a market capitalization of US$75m, which means it wouldn't have the attention of many institutional investors. In the chart below below, we can see that institutions own shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about NICK.

See our latest analysis for Nicholas Financial

NasdaqGS:NICK Ownership Summary, September 11th 2019

What Does The Institutional Ownership Tell Us About Nicholas Financial?

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.

We can see that Nicholas Financial does have institutional investors; and they hold 41% of the stock. 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. 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 Nicholas Financial's earnings history, below. Of course, the future is what really matters.

NasdaqGS:NICK Income Statement, September 11th 2019

It looks like hedge funds own 31% of Nicholas Financial shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Nicholas Financial

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.

We can see that insiders own shares in Nicholas Financial, Inc.. As individuals, the insiders collectively own US$1.4m worth of the US$75m company. This shows at least some alignment, but I usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 26% ownership, the general public have some degree of sway over NICK. 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:

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.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.