Individual investors who have a significant stake must be disappointed along with institutions after Yellow Cake plc's (LON:YCA) market cap dropped by UK£87m

Key Insights

• Yellow Cake's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 45% ownership
• Institutional ownership in Yellow Cake is 35%

Every investor in Yellow Cake plc (LON:YCA) 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 individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 5.9% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 35% stock also took a hit.

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

See our latest analysis for Yellow Cake

What Does The Institutional Ownership Tell Us About Yellow Cake?

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.

We can see that Yellow Cake does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Yellow Cake's historic earnings and revenue below, but keep in mind there's always more to the story.

It looks like hedge funds own 9.1% of Yellow Cake shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is MM Asset Management Inc, with ownership of 9.1%. With 4.8% and 4.3% of the shares outstanding respectively, Kopernik Global Investors, LLC and IBG LLC, Asset Management Arm are the second and third largest shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Yellow Cake

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.

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 data suggests that insiders own under 1% of Yellow Cake plc in their own names. Keep in mind that it's a big company, and the insiders own UK£1.7m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 53% stake in Yellow Cake, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

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 3 warning signs for Yellow Cake you should be aware of, and 2 of them shouldn't be ignored.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

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

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.