Institutional investors may adopt severe steps after Trifast plc's (LON:TRI) latest 21% drop adds to a year losses

Key Insights

• Institutions' substantial holdings in Trifast implies that they have significant influence over the company's share price
• A total of 5 investors have a majority stake in the company with 54% ownership
• Insiders have bought recently

If you want to know who really controls Trifast plc (LON:TRI), then you'll have to look at the makeup of its share registry. With 73% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, institutional investors endured the highest losses last week after market cap fell by UK£27m. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 6.5% might not go down well especially with this category of shareholders. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the downtrend continues, institutions may face pressures to sell Trifast, which might have negative implications on individual investors.

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

View our latest analysis for Trifast

What Does The Institutional Ownership Tell Us About Trifast?

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 Trifast. 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. 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 Trifast, (below). Of course, keep in mind that there are other factors to consider, too.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Our data indicates that hedge funds own 8.1% of Trifast. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Slater Investments Limited is currently the largest shareholder, with 13% of shares outstanding. Harwood Capital LLP is the second largest shareholder owning 13% of common stock, and Schroder Investment Management Limited holds about 12% of the company stock.

On looking further, we found that 54% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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

Insider Ownership Of Trifast

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.

We can see that insiders own shares in Trifast plc. It has a market capitalization of just UK£98m, and insiders have UK£5.4m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in Trifast. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Trifast better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Trifast .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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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.