If you want to know who really controls Laserbond Limited (ASX:LBL), then you’ll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.
With a market capitalization of AU$40m, Laserbond is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutions are not really that prevalent on the share registry. Let’s take a closer look to see what the different types of shareholder can tell us about Laserbond.
What Does The Lack Of Institutional Ownership Tell Us About Laserbond?
Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them.
There are multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Laserbond might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
Laserbond is not owned by hedge funds. With a 10% stake, CEO Wayne Hooper is the largest shareholder. Diane Hooper is the second largest shareholder with 10% of common stock, followed by Gregory Hooper, holding 9.8% of the stock. Interestingly, Gregory Hooper is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company’s top shareholders.
On further inspection, we found that 51% of the share register is owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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 Laserbond
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own the majority of Laserbond Limited. This means they can collectively make decisions for the company. So they have a AU$24m stake in this AU$40m business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.
General Public Ownership
The general public, with a 28% stake in the company, will not easily be ignored. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
Our data indicates that Private Companies hold 9.6%, of the company’s shares. 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.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we’ve discovered 3 warning signs for Laserbond (1 is a bit unpleasant!) that you should be aware of before investing here.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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. 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. Thank you for reading.