While individual investors own 39% of New Hope Corporation Limited (ASX:NHC), public companies are its largest shareholders with 39% ownership

Key Insights

• Significant control over New Hope by public companies implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 4 shareholders
• Insiders have been buying lately

If you want to know who really controls New Hope Corporation Limited (ASX:NHC), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 39% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, individual investors make up 39% of the company’s shareholders.

Let's delve deeper into each type of owner of New Hope, beginning with the chart below.

Check out our latest analysis for New Hope

What Does The Institutional Ownership Tell Us About New Hope?

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 New Hope does have institutional investors; and they hold a good portion of the company's 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. 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 New Hope, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in New Hope. The company's largest shareholder is Washington H. Soul Pattinson and Company Limited, with ownership of 39%. In comparison, the second and third largest shareholders hold about 5.5% and 3.0% of the stock.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of New Hope

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own some shares in New Hope Corporation Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around AU$66m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in New Hope. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 39% of the New Hope shares on issue. 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. For example, we've discovered 2 warning signs for New Hope (1 is a bit unpleasant!) that you should be aware of before investing here.

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.