The recent UK£49m market cap decrease is likely to have disappointed insiders invested in FW Thorpe Plc (LON:TFW)

Key Insights

• FW Thorpe's significant insider ownership suggests inherent interests in company's expansion
• 55% of the business is held by the top 4 shareholders
• Institutional ownership in FW Thorpe is 24%

Every investor in FW Thorpe Plc (LON:TFW) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to UK£490m last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of FW Thorpe, beginning with the chart below.

Check out our latest analysis for FW Thorpe

What Does The Institutional Ownership Tell Us About FW Thorpe?

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 FW Thorpe. 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 FW Thorpe's historic earnings and revenue below, but keep in mind there's always more to the story.

FW Thorpe is not owned by hedge funds. Andrew Thorpe is currently the largest shareholder, with 22% of shares outstanding. Ian Thorpe is the second largest shareholder owning 21% of common stock, and Nicholas Brangwin holds about 6.0% of the company stock.

On looking further, we found that 55% 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of FW Thorpe

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

It seems that insiders own more than half the FW Thorpe Plc stock. This gives them a lot of power. That means they own UK£255m worth of shares in the UK£490m company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 23% stake in FW Thorpe. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 FW Thorpe , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.