Every investor in United Insurance Holdings Corp. (NASDAQ:UIHC) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. 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.
United Insurance Holdings is not a large company by global standards. It has a market capitalization of US$354m, which means it wouldn’t have the attention of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let’s delve deeper into each type of owner, to discover more about United Insurance Holdings.
What Does The Institutional Ownership Tell Us About United Insurance Holdings?
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 United Insurance Holdings does have institutional investors; and they hold 34% of the stock. 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. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see United Insurance Holdings’s historic earnings and revenue, below, but keep in mind there’s always more to the story.
We note that hedge funds don’t have a meaningful investment in United Insurance Holdings. R. Peed is currently the largest shareholder, with 40% of shares outstanding. The second largest shareholder with 8.3%, is BlackRock, Inc., followed by Gregory Branch, with an ownership of 5.2%. Gregory Branch also happens to hold the title of Chairman of the Board.
Our analysis suggests that the top 3 shareholders collectively control 54% of the company’s shares, implying that they have considerable power to influence the company’s decisions.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of United Insurance Holdings
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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.
It seems that insiders own more than half the United Insurance Holdings Corp. stock. This gives them a lot of power. So they have a US$182m stake in this US$354m business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public holds a 14% stake in UIHC. 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.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we’ve spotted with United Insurance Holdings .
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. 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.