Yahoo Finance Li-Cycle Holdings Corp. (NYSE:LICY) surges 31%; retail investors who own 53% shares profited along with institutions
Key Insights
The considerable ownership by retail investors in Li-Cycle Holdings indicates that they collectively have a greater say in management and business strategy
The top 25 shareholders own 43% of the company
If you want to know who really controls Li-Cycle Holdings Corp. (NYSE:LICY), then you'll have to look at the makeup of its share registry. With 53% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While retail investors were the group that reaped the most benefits after last week’s 31% price gain, institutions also received a 28% cut.
In the chart below, we zoom in on the different ownership groups of Li-Cycle Holdings.
Check out our latest analysis for Li-Cycle Holdings
What Does The Institutional Ownership Tell Us About Li-Cycle Holdings?
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.
We can see that Li-Cycle Holdings does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Li-Cycle Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
Li-Cycle Holdings is not owned by hedge funds. With a 14% stake, CEO Ajay Kochhar is the largest shareholder. BlackRock, Inc. is the second largest shareholder owning 5.3% of common stock, and Carnelian Energy Capital holds about 4.9% of the company stock.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Li-Cycle Holdings
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. 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 information suggests that insiders maintain a significant holding in Li-Cycle Holdings Corp.. It has a market capitalization of just US$150m, and insiders have US$29m worth of shares in their own names. 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
The general public, mostly comprising of individual investors, collectively holds 53% of Li-Cycle Holdings shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Li-Cycle Holdings is showing 2 warning signs in our investment analysis , 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
