Private companies who hold 53% of Metro Bank Holdings PLC (LON:MTRO) gained 47%, institutions profited as well

Key Insights

• Significant control over Metro Bank Holdings by private companies implies that the general public has more power to influence management and governance-related decisions
• Spaldy Investments Limited owns 53% of the company
• Institutional ownership in Metro Bank Holdings is 21%

Every investor in Metro Bank Holdings PLC (LON:MTRO) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 53% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While private companies were the group that benefitted the most from last week’s UK£120m market cap gain, institutions too had a 21% share in those profits.

Let's take a closer look to see what the different types of shareholders can tell us about Metro Bank Holdings.

View our latest analysis for Metro Bank Holdings

What Does The Institutional Ownership Tell Us About Metro Bank Holdings?

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 Metro Bank 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Metro Bank Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Our data indicates that hedge funds own 14% of Metro Bank Holdings. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Spaldy Investments Limited is currently the company's largest shareholder with 53% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 8.7% and 5.7% of the stock. Additionally, the company's CEO Daniel Frumkin directly holds 1.2% of the total shares outstanding.

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

Insider Ownership Of Metro Bank 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in Metro Bank Holdings PLC. In their own names, insiders own UK£4.7m worth of stock in the UK£375m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 10% stake in Metro Bank Holdings. 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 Company Ownership

Our data indicates that Private Companies hold 53%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 Metro Bank Holdings is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

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.

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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