Significant insider control over Record implies vested interests in company growth
A total of 4 investors have a majority stake in the company with 53% ownership
A look at the shareholders of Record plc (LON:REC) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 41% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
It's interesting to note that insiders have been buying shares recently. This might indicate that they expect share prices to rise in the near future.
Let's take a closer look to see what the different types of shareholders can tell us about Record.
What Does The Institutional Ownership Tell Us About Record?
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 Record. 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 Record's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Record. Our data shows that Neil Record is the largest shareholder with 29% of shares outstanding. Record Plc, ESOP is the second largest shareholder owning 11% of common stock, and Leslie Meier holds about 8.4% of the company stock. Leslie Meier, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
On looking further, we found that 53% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
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 Record
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own a reasonable proportion of Record plc. Insiders own UK£65m worth of shares in the UK£159m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Record. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
It seems that Private Companies own 4.3%, of the Record stock. 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.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Record .
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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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