With 28% ownership in Kore Potash plc (LON:KP2), institutional investors have a lot riding on the business

Explore Kore Potash's Fair Values from the Community and select yours

Key Insights

• Institutions' substantial holdings in Kore Potash implies that they have significant influence over the company's share price
• A total of 6 investors have a majority stake in the company with 53% ownership
• Insiders own 17% of Kore Potash

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To get a sense of who is truly in control of Kore Potash plc (LON:KP2), it is important to understand the ownership structure of the business. With 28% 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).

And last week, institutional investors ended up benefitting the most after the company hit UK£131m in market cap. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 50%.

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

View our latest analysis for Kore Potash

What Does The Institutional Ownership Tell Us About Kore Potash?

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

Kore Potash is not owned by hedge funds. Harlequin Investments Ltd is currently the largest shareholder, with 12% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 8.1%, of the shares outstanding, respectively. David Hathorn, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We did some more digging and found that 6 of the top shareholders account for roughly 53% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Kore Potash

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 insiders own a significant proportion of Kore Potash plc. It has a market capitalization of just UK£131m, and insiders have UK£23m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kore Potash. 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

It seems that Private Companies own 23%, of the Kore Potash stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

Public companies currently own 15% of Kore Potash stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Kore Potash you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.