Yahoo Finance While institutions invested in Yellow Cake plc (LON:YCA) benefited from last week's 4.0% gain, retail investors stood to gain the most
Key Insights
The considerable ownership by retail investors in Yellow Cake indicates that they collectively have a greater say in management and business strategy
A total of 25 investors have a majority stake in the company with 45% ownership
A look at the shareholders of Yellow Cake plc (LON:YCA) can tell us which group is most powerful. With 53% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While retail investors were the group that benefitted the most from last week’s UK£51m market cap gain, institutions too had a 35% share in those profits.
In the chart below, we zoom in on the different ownership groups of Yellow Cake.
Check out our latest analysis for Yellow Cake
What Does The Institutional Ownership Tell Us About Yellow Cake?
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 Yellow Cake does have institutional investors; and they hold a good portion of the company's stock. 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 Yellow Cake, (below). Of course, keep in mind that there are other factors to consider, too.
It would appear that 9.1% of Yellow Cake shares are controlled by hedge funds. 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. MM Asset Management Inc is currently the largest shareholder, with 9.1% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.8% and 4.3% of the 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.
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. 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 Yellow Cake
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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 most recent data indicates that insiders own less than 1% of Yellow Cake plc. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own UK£1.6m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public -- including retail investors -- own 53% of Yellow Cake. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Yellow Cake (of which 2 don't sit too well with us!) you should know about.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
