Retail investors who hold 42% of Hammond Power Solutions Inc. (TSE:HPS.A) gained 9.9%, institutions profited as well

Key Insights

• Significant control over Hammond Power Solutions by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 10 shareholders own 50% of the company
• Insider ownership in Hammond Power Solutions is 27%

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Every investor in Hammond Power Solutions Inc. (TSE:HPS.A) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While retail investors were the group that reaped the most benefits after last week’s 9.9% price gain, institutions also received a 30% cut.

Let's delve deeper into each type of owner of Hammond Power Solutions, beginning with the chart below.

See our latest analysis for Hammond Power Solutions

What Does The Institutional Ownership Tell Us About Hammond Power Solutions?

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 Hammond Power Solutions. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Hammond Power Solutions' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Hammond Power Solutions. Our data shows that William Hammond is the largest shareholder with 27% of shares outstanding. With 7.5% and 6.1% of the shares outstanding respectively, Connor, Clark & Lunn Investment Management Ltd. and Capital Research and Management Company are the second and third largest shareholders.

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.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Hammond Power Solutions

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 information suggests that insiders maintain a significant holding in Hammond Power Solutions Inc.. Insiders own CA$456m worth of shares in the CA$1.7b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in Hammond Power Solutions. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with Hammond Power Solutions .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.