What Is The Ownership Structure Like For HumanCo Acquisition Corp. (NASDAQ:HMCO)?
A look at the shareholders of HumanCo Acquisition Corp. (NASDAQ:HMCO) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.
HumanCo Acquisition is a smaller company with a market capitalization of US$376m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about HumanCo Acquisition.
Check out our latest analysis for HumanCo Acquisition
What Does The Institutional Ownership Tell Us About HumanCo Acquisition?
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.
HumanCo Acquisition already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see HumanCo Acquisition's historic earnings and revenue below, but keep in mind there's always more to the story.
Our data indicates that hedge funds own 5.3% of HumanCo Acquisition. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Humanco Acquisition Holdings, Llc is currently the company's largest shareholder with 18% of shares outstanding. With 5.3% and 3.9% of the shares outstanding respectively, Arena Capital Advisors, LLC and Candlestick Capital Management LP are the second and third largest shareholders.
After doing some more digging, we found that the top 18 have the combined ownership of 50% 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of HumanCo Acquisition
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 data suggests that insiders own under 1% of HumanCo Acquisition Corp. in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. It seems the board members have no more than US$2.0m worth of shares in the US$376m company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over HumanCo Acquisition. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
We can see that Private Companies own 18%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
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. Case in point: We've spotted 3 warning signs for HumanCo Acquisition you should be aware of, and 1 of them can't be ignored.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.
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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.
