Stock Analysis

With 78% ownership of the shares, Telecom Plus Plc (LON:TEP) is heavily dominated by institutional owners

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LSE:TEP
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Key Insights

  • Institutions' substantial holdings in Telecom Plus implies that they have significant influence over the company's share price
  • 51% of the business is held by the top 13 shareholders
  • Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Telecom Plus Plc (LON:TEP) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 78% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

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

Check out our latest analysis for Telecom Plus

ownership-breakdown
LSE:TEP Ownership Breakdown March 16th 2023

What Does The Institutional Ownership Tell Us About Telecom Plus?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

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

earnings-and-revenue-growth
LSE:TEP Earnings and Revenue Growth March 16th 2023

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Telecom Plus is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is abrdn plc with 9.2% of shares outstanding. Charles Wigoder is the second largest shareholder owning 6.7% of common stock, and J.P. Morgan Asset Management, Inc. holds about 5.2% of the company stock.

A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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 some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Telecom Plus

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.

Our most recent data indicates that insiders own some shares in Telecom Plus Plc. This is a big company, so it is good to see this level of alignment. Insiders own UK£120m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. 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 Telecom Plus better, we need to consider many other factors. For example, we've discovered 1 warning sign for Telecom Plus that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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