Netwealth Group Limited's (ASX:NWL): Senior Key Executive Michael Heine is the most bullish insider, and their stock value gained 4.2% last week
Key Insights
Netwealth Group's significant insider ownership suggests inherent interests in company's expansion
The top 2 shareholders own 54% of the company
If you want to know who really controls Netwealth Group Limited (ASX:NWL), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, insiders scored the highest last week as the company hit AU$5.2b market cap following a 4.2% gain in the stock.
Let's take a closer look to see what the different types of shareholders can tell us about Netwealth Group.
See our latest analysis for Netwealth Group
What Does The Institutional Ownership Tell Us About Netwealth Group?
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 Netwealth Group. 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. 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 Netwealth Group, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in Netwealth Group. From our data, we infer that the largest shareholder is Michael Heine (who also holds the title of Senior Key Executive) with 48% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. Netwealth Investments Ltd. is the second largest shareholder owning 5.9% of common stock, and The Vanguard Group, Inc. holds about 1.6% of the company stock. Furthermore, CEO Matthew Alexander Heine is the owner of 1.5% of the company's shares.
After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Netwealth Group
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 insiders own more than half of Netwealth Group Limited. This gives them effective control of the company. That means insiders have a very meaningful AU$2.6b stake in this AU$5.2b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.
General Public Ownership
With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Netwealth Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Netwealth Group better, we need to consider many other factors.
I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
