Hancock & Gore Ltd (ASX:HNG) insiders have recently purchased stock and their bets paid off last week as company hit AU$161m market cap

Key Insights

• Insiders appear to have a vested interest in Hancock & Gore's growth, as seen by their sizeable ownership
• 51% of the business is held by the top 10 shareholders
• Recent purchases by insiders

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A look at the shareholders of Hancock & Gore Ltd (ASX:HNG) can tell us which group is most powerful. The group holding the most number of shares in the company, around 41% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Our data shows that insiders recently bought shares in the company and they were rewarded after market cap rose AU$24m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Hancock & Gore.

View our latest analysis for Hancock & Gore

What Does The Institutional Ownership Tell Us About Hancock & Gore?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Hancock & Gore. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Hancock & Gore, (below). Of course, keep in mind that there are other factors to consider, too.

Hancock & Gore is not owned by hedge funds. Timothy James is currently the company's largest shareholder with 12% of shares outstanding. Perennial Value Management Limited is the second largest shareholder owning 12% of common stock, and Alexander Beard holds about 7.5% of the company stock. Alexander Beard, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Hancock & Gore

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

Our information suggests that insiders maintain a significant holding in Hancock & Gore Ltd. Insiders own AU$66m worth of shares in the AU$161m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 37% stake in Hancock & Gore. 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

It seems that Private Companies own 7.9%, of the Hancock & Gore stock. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Hancock & Gore (at least 3 which are concerning) , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.