Significant control over Whitehaven Coal by retail investors implies that the general public has more power to influence management and governance-related decisions
The top 25 shareholders own 43% of the company
Insiders have been buying lately
A look at the shareholders of Whitehaven Coal Limited (ASX:WHC) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While the holdings of retail investors took a hit after last week’s 9.0% price drop, institutions with their 42% holdings also suffered.
Let's take a closer look to see what the different types of shareholders can tell us about Whitehaven Coal.
See our latest analysis for Whitehaven Coal
ASX:WHC Ownership Breakdown March 18th 2024
What Does The Institutional Ownership Tell Us About Whitehaven Coal?
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 Whitehaven Coal 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 Whitehaven Coal, (below). Of course, keep in mind that there are other factors to consider, too.
ASX:WHC Earnings and Revenue Growth March 18th 2024
Whitehaven Coal is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Dimensional Fund Advisors LP with 5.7% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 5.0% of common stock, and JPMorgan Chase & Co, Brokerage and Securities Investments holds about 4.4% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Whitehaven Coal
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 some shares in Whitehaven Coal Limited. This is a big company, so it is good to see this level of alignment. Insiders own AU$115m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 52% stake in Whitehaven Coal, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Private Company Ownership
It seems that Private Companies own 3.2%, of the Whitehaven Coal stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 4 warning signs for Whitehaven Coal (2 can't be ignored) that you should be aware of.
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.
