Every investor in Literacy Capital plc (LON:BOOK) should know the most powerful shareholder groups. With a 69% stake, individual insiders own the most shares in the company. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.
Interestingly, insiders have been buying stocks recently. This could indicate that they expect stock prices to rise in the near future.
In the table below, we zoom in on Literacy Capital’s different ownership groups.
See our latest analysis for Literacy Capital
What does institutional ownership tell us about Literacy Capital?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.
We can see that Literacy Capital has institutional investors; and they own a good part of the shares of the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out Literacy Capital’s earnings history below. Of course, the future is what really matters.
Hedge funds don’t have a lot of shares in Literacy Capital. Our data suggests that Paul R. Pindar, who is also the company’s Top Key Executive, owns the most shares at 28%. When an insider owns a significant amount of stock in a company, investors view it as a positive sign, as it suggests that insiders are willing to tie their wealth to the future of the company. Meanwhile, the second and third largest shareholders hold 11% and 7.6% of the outstanding shares respectively. Interestingly, the second largest shareholder, Richard Pindar, is also CEO, again, indicating strong insider ownership among the company’s major shareholders.
Looking further, we found that 52% of the shares are held by the top 4 shareholders. In other words, these shareholders have a say in the decisions of the company.
While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. We don’t see any analyst coverage of the stock at this time, so the company is unlikely to be widely held.
Insider ownership of literacy capital
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
It appears that insiders own more than half of the shares of Literacy Capital plc. It gives them a lot of power. So they have a £164m stake in this £237m business. Most would be delighted to see the board investing alongside them. You might want to find out (free) whether they bought or sold.
General public property
The general public, including retail investors, owns 15% of the company’s capital and therefore cannot be easily ignored. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
Next steps:
I find it very interesting to see who exactly owns a business. But to really get insight, we also need to consider other information. Know that Literacy Capital shows 1 warning sign in our investment analysis you should know…
Sure this may not be the best stock to buy. Therefore, you may want to see our free set of interesting prospects benefiting from a favorable financial situation.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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