With 58% ownership in Ten Lifestyle Group Plc (LON:TENG), institutional investors have a lot riding on the business

By
Simply Wall St
Published
January 13, 2022
AIM:TENG
Source: Shutterstock

If you want to know who really controls Ten Lifestyle Group Plc (LON:TENG), then you'll have to look at the makeup of its share registry. With 58% 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 as as result, institutional investors reaped the most rewards after the company's stock price gained 19% last week. The one-year return on investment is currently 34% and last week's gain would have been more than welcomed.

In the chart below, we zoom in on the different ownership groups of Ten Lifestyle Group.

View our latest analysis for Ten Lifestyle Group

ownership-breakdown
AIM:TENG Ownership Breakdown January 13th 2022

What Does The Institutional Ownership Tell Us About Ten Lifestyle 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.

As you can see, institutional investors have a fair amount of stake in Ten Lifestyle Group. 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 Ten Lifestyle Group's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
AIM:TENG Earnings and Revenue Growth January 13th 2022

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Ten Lifestyle Group. With a 13% stake, CEO Alexander Cheatle is the largest shareholder. In comparison, the second and third largest shareholders hold about 12% and 10% of the stock.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Ten Lifestyle Group

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 most recent data indicates that insiders own a reasonable proportion of Ten Lifestyle Group Plc. It has a market capitalization of just UK£96m, and insiders have UK£21m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 15% stake in Ten Lifestyle Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 4.1%, of the Ten Lifestyle Group stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Ten Lifestyle Group better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Ten Lifestyle Group (of which 1 is concerning!) you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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