Stock Analysis

TP ICAP Group PLC's (LON:TCAP) institutional investors lost 11% last week but have benefitted from longer-term gains

Published
LSE:TCAP
Source: Shutterstock

Key Insights

  • Significantly high institutional ownership implies TP ICAP Group's stock price is sensitive to their trading actions
  • The top 7 shareholders own 50% of the company
  • Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of TP ICAP Group PLC (LON:TCAP) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 67% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 11% last week. However, the 45% one-year return to shareholders might have softened the blow. But they would probably be wary of future losses.

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

See our latest analysis for TP ICAP Group

ownership-breakdown
LSE:TCAP Ownership Breakdown March 14th 2023

What Does The Institutional Ownership Tell Us About TP ICAP Group?

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.

TP ICAP Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at TP ICAP Group's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
LSE:TCAP Earnings and Revenue Growth March 14th 2023

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in TP ICAP Group. Looking at our data, we can see that the largest shareholder is Liontrust Asset Management PLC with 11% of shares outstanding. Schroder Investment Management Limited is the second largest shareholder owning 10.0% of common stock, and Jupiter Fund Management Plc holds about 9.0% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. 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 TP ICAP Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 most recent data indicates that insiders own less than 1% of TP ICAP Group PLC. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around UK£1.1m worth of shares (at current prices). 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 33% stake in TP ICAP Group. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand TP ICAP Group better, we need to consider many other factors. Take risks for example - TP ICAP Group has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

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.

Valuation is complex, but we're helping make it simple.

Find out whether TP ICAP Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis