Thinkific Labs Inc.'s (TSE:THNC) most bullish insider is CEO Greg Smith, and their holdings value went up by 11% last week

Key Insights

• Insiders appear to have a vested interest in Thinkific Labs' growth, as seen by their sizeable ownership
• The top 2 shareholders own 53% of the company
• Institutional ownership in Thinkific Labs is 14%

Every investor in Thinkific Labs Inc. (TSE:THNC) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit CA$191m market cap following a 11% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Thinkific Labs.

View our latest analysis for Thinkific Labs

What Does The Institutional Ownership Tell Us About Thinkific Labs?

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.

We can see that Thinkific Labs does have institutional investors; and they hold a good portion of the company's stock. 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 Thinkific Labs' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Thinkific Labs. The company's CEO Greg Smith is the largest shareholder with 30% of shares outstanding. Rhino Ventures is the second largest shareholder owning 24% of common stock, and Matthew Smith holds about 12% of the company stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. 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 Thinkific Labs

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.

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 Thinkific Labs Inc.. Insiders have a CA$80m stake in this CA$191m business. 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

The general public, who are usually individual investors, hold a 21% stake in Thinkific Labs. 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.

Private Equity Ownership

With an ownership of 24%, 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.

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. Case in point: We've spotted 2 warning signs for Thinkific Labs you should be aware of, and 1 of them can't be ignored.

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.