Significant control over New Hope by public companies implies that the general public has more power to influence management and governance-related decisions
51% of the business is held by the top 4 shareholders
Every investor in New Hope Corporation Limited (ASX:NHC) should be aware of the most powerful shareholder groups. With 38% stake, public companies 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).
As a result, public companies collectively scored the highest last week as the company hit AU$5.3b market cap following a 7.3% gain in the stock.
In the chart below, we zoom in on the different ownership groups of New Hope.
What Does The Institutional Ownership Tell Us About New Hope?
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.
As you can see, institutional investors have a fair amount of stake in New Hope. 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 New Hope's earnings history below. Of course, the future is what really matters.
ASX:NHC Earnings and Revenue Growth April 5th 2023
New Hope is not owned by hedge funds. Our data shows that Washington H. Soul Pattinson and Company Limited is the largest shareholder with 38% of shares outstanding. The second and third largest shareholders are L1 Capital Pty. Limited and JPMorgan Chase & Co, Brokerage and Securities Investments, with an equal amount of shares to their name at 4.6%.
On looking further, we found that 51% 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.
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. 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 New Hope
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. 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.
Shareholders would probably be interested to learn that insiders own shares in New Hope Corporation Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around AU$88m 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 34% stake in New Hope. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Public Company Ownership
It appears to us that public companies own 38% of New Hope. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand New Hope better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for New Hope (of which 1 makes us a bit uncomfortable!) you should know about.
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.
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