Gregory Taylor Step One Clothing Limited's (ASX:STP) CEO is the most bullish insider, and their stock value gained 10%last week

Key Insights

• Significant insider control over Step One Clothing implies vested interests in company growth
• Gregory Taylor owns 59% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

We've discovered 1 warning sign about Step One Clothing. View them for free.

A look at the shareholders of Step One Clothing Limited (ASX:STP) can tell us which group is most powerful. The group holding the most number of shares in the company, around 63% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit AU$168m market cap following a 10% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Step One Clothing.

Check out our latest analysis for Step One Clothing

What Does The Institutional Ownership Tell Us About Step One Clothing?

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.

Institutions have a very small stake in Step One Clothing. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Step One Clothing is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Gregory Taylor with 59% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. For context, the second largest shareholder holds about 2.5% of the shares outstanding, followed by an ownership of 2.1% by the third-largest shareholder. Interestingly, the second-largest shareholder, Michael Reddie is also Chief Legal Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

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 Step One Clothing

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 the majority of Step One Clothing Limited. This means they can collectively make decisions for the company. Given it has a market cap of AU$168m, that means they have AU$106m worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Step One Clothing better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Step One Clothing you should be aware of.

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.