Institutions profited after Aston Martin Lagonda Global Holdings plc's (LON:AML) market cap rose UK£84m last week but private companies profited the most

Key Insights

• Significant control over Aston Martin Lagonda Global Holdings by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 4 investors have a majority stake in the company with 54% ownership
• Insiders have bought recently

A look at the shareholders of Aston Martin Lagonda Global Holdings plc (LON:AML) can tell us which group is most powerful. The group holding the most number of shares in the company, around 25% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 6.8% increase in the stock price last week, private companies profited the most, but institutions who own 25% stock also stood to gain from the increase.

Let's take a closer look to see what the different types of shareholders can tell us about Aston Martin Lagonda Global Holdings.

Check out our latest analysis for Aston Martin Lagonda Global Holdings

What Does The Institutional Ownership Tell Us About Aston Martin Lagonda Global Holdings?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Aston Martin Lagonda Global Holdings. 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. 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 Aston Martin Lagonda Global Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

Aston Martin Lagonda Global Holdings is not owned by hedge funds. The company's largest shareholder is Public Investment Fund, with ownership of 20%. Meanwhile, the second and third largest shareholders, hold 15% and 9.8%, of the shares outstanding, respectively. Lawrence Stroll, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

On looking further, we found that 54% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 Aston Martin Lagonda Global Holdings

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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 Aston Martin Lagonda Global Holdings plc. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around UK£131m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 10% stake in the company, and hence can't easily be ignored. 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.

Private Company Ownership

Our data indicates that Private Companies hold 25%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

We can see that public companies hold 8.9% of the Aston Martin Lagonda Global Holdings 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Aston Martin Lagonda Global Holdings , and understanding them should be part of your investment process.

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.

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