In spite of recent selling, insiders still control 53% of FW Thorpe Plc (LON:TFW)
Key Insights
FW Thorpe's significant insider ownership suggests inherent interests in company's expansion
The top 3 shareholders own 50% of the company
Every investor in FW Thorpe Plc (LON:TFW) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 53% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And insiders own the top position in the company’s share registry despite recent sales.
In the chart below, we zoom in on the different ownership groups of FW Thorpe.
See our latest analysis for FW Thorpe
What Does The Institutional Ownership Tell Us About FW Thorpe?
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 FW Thorpe. 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 FW Thorpe, (below). Of course, keep in mind that there are other factors to consider, too.
FW Thorpe is not owned by hedge funds. Our data shows that Andrew Thorpe is the largest shareholder with 22% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 21% and 6.7%, of the shares outstanding, respectively.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of FW Thorpe
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. 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 FW Thorpe Plc. This gives them effective control of the company. Given it has a market cap of UK£416m, that means they have UK£221m worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public-- including retail investors -- own 23% stake in the company, and hence can't 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.
I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
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.
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