Both retail investors who control a good portion of Electro Optic Systems Holdings Limited (ASX:EOS) along with institutions must be dismayed after last week's 15% decrease

Key Insights

• Significant control over Electro Optic Systems Holdings by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 41% of the company
• Institutional ownership in Electro Optic Systems Holdings is 18%

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If you want to know who really controls Electro Optic Systems Holdings Limited (ASX:EOS), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 59% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions who own 18% came under pressure after market cap dropped to AU$1.1b last week,retail investors took the most losses.

In the chart below, we zoom in on the different ownership groups of Electro Optic Systems Holdings.

View our latest analysis for Electro Optic Systems Holdings

What Does The Institutional Ownership Tell Us About Electro Optic Systems 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.

As you can see, institutional investors have a fair amount of stake in Electro Optic Systems Holdings. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Electro Optic Systems Holdings' earnings history below. Of course, the future is what really matters.

Electro Optic Systems Holdings is not owned by hedge funds. WHSP Holdings Limited is currently the company's largest shareholder with 9.1% of shares outstanding. Archon Capital Management LLC is the second largest shareholder owning 4.9% of common stock, and FMR LLC holds about 4.6% of the company stock.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Electro Optic Systems Holdings

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. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Shareholders would probably be interested to learn that insiders own shares in Electro Optic Systems Holdings Limited. It has a market capitalization of just AU$1.1b, and insiders have AU$59m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 59% of Electro Optic Systems Holdings shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

Our data indicates that Private Companies hold 5.8%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

It appears to us that public companies own 9.1% of Electro Optic Systems Holdings. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

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. Take risks for example - Electro Optic Systems Holdings has 1 warning sign we think you should be aware of.

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. 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.