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Institutional owners may ignore Intermediate Capital Group plc's (LON:ICG) recent UK£464m market cap decline as longer-term profits stay in the green

Key Insights

  • Given the large stake in the stock by institutions, Intermediate Capital Group's stock price might be vulnerable to their trading decisions

  • 50% of the business is held by the top 20 shareholders

  • Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

A look at the shareholders of Intermediate Capital Group plc (LON:ICG) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 88% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 7.6% last week. However, the 63% one-year return to shareholders may have helped lessen their pain. But they would probably be wary of future losses.

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Let's take a closer look to see what the different types of shareholders can tell us about Intermediate Capital Group.

See our latest analysis for Intermediate Capital Group

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Intermediate Capital Group?

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.

We can see that Intermediate Capital Group does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Intermediate Capital Group's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
earnings-and-revenue-growth

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in Intermediate Capital Group. The Vanguard Group, Inc. is currently the company's largest shareholder with 4.4% of shares outstanding. The second and third largest shareholders are abrdn plc and Columbia Management Investment Advisers, LLC, with an equal amount of shares to their name at 4.4%. Furthermore, CEO Benoit Laurent Durteste is the owner of 0.5% of the company's shares.

After doing some more digging, we found that the top 20 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Intermediate Capital Group

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.

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 data suggests that insiders own under 1% of Intermediate Capital Group plc in their own names. Keep in mind that it's a big company, and the insiders own UK£37m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Intermediate Capital Group. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Intermediate Capital Group (at least 1 which makes us a bit uncomfortable) , and understanding them should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.