Private companies invested in 3P Learning Limited (ASX:3PL) copped the brunt of last week's AU$63m market cap decline

Key Insights

• The considerable ownership by private companies in 3P Learning indicates that they collectively have a greater say in management and business strategy
• A total of 3 investors have a majority stake in the company with 69% ownership
• Insider ownership in 3P Learning is 21%

A look at the shareholders of 3P Learning Limited (ASX:3PL) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 30% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 19% decrease in the stock price last week, private companies suffered the most losses, but insiders who own 21% stock also took a hit.

Let's take a closer look to see what the different types of shareholders can tell us about 3P Learning.

View our latest analysis for 3P Learning

What Does The Institutional Ownership Tell Us About 3P Learning?

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.

3P Learning already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 3P Learning's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in 3P Learning. Blake Sandblom Trust is currently the largest shareholder, with 29% of shares outstanding. Matthew Sandblom is the second largest shareholder owning 20% of common stock, and Viburnum Funds Pty Ltd. holds about 20% of the company stock. Matthew Sandblom, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of 3P Learning

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 a reasonable proportion of 3P Learning Limited. Insiders own AU$56m worth of shares in the AU$264m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 3P Learning. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 20%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 30%, 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that 3P Learning is showing 1 warning sign in our investment analysis , you should know about...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.