Institutional owners of ITM Power Plc (LON: ITM) can be pleased with recent gains after losing 17% in the past year
To get a sense of who actually controls ITM Power Plc (LON: ITM), it’s important to understand the ownership structure of the business. With 54% of the capital, the institutions hold the maximum number of shares in the company. In other words, the group has everything to gain (or lose the most) from its investment in the business.
Last week’s £ 109million market capitalization gain would likely be appreciated by institutional investors, especially after a year of losses of 17%.
Let’s dig deeper into each type of ITM Power owner, starting with the table below.
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What does institutional ownership tell us about ITM Power?
Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
ITM Power already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This may indicate that the company has a certain degree of credibility in the investment community. However, it is better not to rely on the so-called validation that accompanies institutional investors. They too are sometimes wrong. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell shares quickly. This risk is higher in a company without a history of growth. You can see ITM Power’s historical revenue and revenue below, but keep in mind that there is always more to tell.
Since institutional investors own more than half of the issued shares, the board will likely need to pay attention to their preferences. We note that the hedge funds do not have a significant investment in ITM Power. Our data shows that Linde plc is the largest shareholder with 16% of the shares outstanding. With 8.1% and 5.5% of shares outstanding, respectively, JCBResearch and Hargreaves Lansdown Asset Management Limited are the second and third shareholders.
We further researched and found that 10 of the major shareholders represent around 50% of the register, which implies that in addition to the major shareholders there are a few smaller shareholders, thus balancing each other’s interests somewhat.
While it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. There are a lot of analysts covering the stock, so you can look at expected growth quite easily.
ITM Power Insider Ownership
The definition of business insiders can be subjective and vary from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also confer immense power on a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders hold shares of ITM Power Plc. Insiders have a significant stake worth £ 117million. Most would see this as a real benefit. If you would like to explore the issue of Insider Alignment, you can click here to see if any Insiders have bought or sold.
General public property
The general public, who are generally individual investors, own 14% of ITM Power’s capital. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.
Owned by a private company
It appears that private companies hold 8.2% of ITM Power’s shares. It might be worth pursuing the matter further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the business.
Public enterprise ownership
We see that public companies hold 18% of ITM Power shares at issue. It’s hard to say for sure, but it suggests that they have intertwined business interests. This can be a strategic issue, so it’s worth watching this space for changes in ownership.
It’s always worth thinking about the different groups that own shares in a company. But to understand ITM Power better, there are many other factors that we need to consider. Note that ITM Power displays 3 warning signs in our investment analysis , you must know…
But finally it’s the future, not the past, which will determine the success of the owners of this business. Therefore, we believe it is advisable to take a look at this free report showing whether analysts are predicting a better future.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.