Northern Technologies International Corporation's (NASDAQ:NTIC) top owners are retail investors with 51% stake, while 31% is held by institutions
Key Insights
The considerable ownership by retail investors in Northern Technologies International indicates that they collectively have a greater say in management and business strategy
A total of 25 investors have a majority stake in the company with 47% ownership
If you want to know who really controls Northern Technologies International Corporation (NASDAQ:NTIC), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 51% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Meanwhile, institutions make up 31% of the company’s shareholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.
Let's take a closer look to see what the different types of shareholders can tell us about Northern Technologies International.
Check out our latest analysis for Northern Technologies International
What Does The Institutional Ownership Tell Us About Northern Technologies International?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors have a fair amount of stake in Northern Technologies International. 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 Northern Technologies International's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Northern Technologies International. The company's largest shareholder is Inter Alia Holding Company, with ownership of 13%. In comparison, the second and third largest shareholders hold about 5.5% and 4.6% of the stock. Additionally, the company's CEO G. Lynch directly holds 1.1% of the total shares outstanding.
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 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. 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 Northern Technologies International
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.
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.
We can report that insiders do own shares in Northern Technologies International Corporation. In their own names, insiders own US$5.6m worth of stock in the US$124m company. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 51% of Northern Technologies International shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Private Company Ownership
Our data indicates that Private Companies hold 13%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Northern Technologies International better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Northern Technologies International you should know about.
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.
