Insiders are the top stockholders in Lovisa Holdings Limited (ASX:LOV), and the recent 4.4% drop might have disappointed them

Key Insights

• Insiders appear to have a vested interest in Lovisa Holdings' growth, as seen by their sizeable ownership
• A total of 4 investors have a majority stake in the company with 52% ownership
• 19% of Lovisa Holdings is held by Institutions

Every investor in Lovisa Holdings Limited (ASX:LOV) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 43% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, insiders endured the biggest losses as the stock fell by 4.4%.

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

Check out our latest analysis for Lovisa Holdings

What Does The Institutional Ownership Tell Us About Lovisa 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.

Lovisa Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Lovisa Holdings' earnings history below. Of course, the future is what really matters.

Lovisa Holdings is not owned by hedge funds. Brett Blundy is currently the company's largest shareholder with 40% of shares outstanding. Challenger Limited is the second largest shareholder owning 4.9% of common stock, and ECP Asset Management Pty Ltd holds about 4.4% of the company stock.

Our research also brought to light the fact that roughly 52% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Lovisa 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 insiders own a significant proportion of Lovisa Holdings Limited. It has a market capitalization of just AU$2.7b, and insiders have AU$1.2b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Lovisa Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 Lovisa Holdings is showing 1 warning sign in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.