While individual investors own 14% of GlaxoSmithKline Pharmaceuticals Limited (NSE:GLAXO), public companies are its largest shareholders with 75% ownership

Key Insights

• Significant control over GlaxoSmithKline Pharmaceuticals by public companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is GSK plc with a 75% stake
• 10% of GlaxoSmithKline Pharmaceuticals is held by Institutions

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If you want to know who really controls GlaxoSmithKline Pharmaceuticals Limited (NSE:GLAXO), then you'll have to look at the makeup of its share registry. With 75% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors, on the other hand, account for 14% of the company's stockholders.

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

Check out our latest analysis for GlaxoSmithKline Pharmaceuticals

What Does The Institutional Ownership Tell Us About GlaxoSmithKline Pharmaceuticals?

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.

We can see that GlaxoSmithKline Pharmaceuticals does have institutional investors; and they hold a good portion of the company's stock. 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. 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 GlaxoSmithKline Pharmaceuticals' earnings history below. Of course, the future is what really matters.

GlaxoSmithKline Pharmaceuticals is not owned by hedge funds. GSK plc is currently the company's largest shareholder with 75% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 1.3% and 1.1%, of the shares outstanding, respectively.

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

Insider Ownership Of GlaxoSmithKline Pharmaceuticals

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.

Our information suggests that GlaxoSmithKline Pharmaceuticals Limited insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own ₹1.6m worth of shares. The absolute value might be more important than the proportional share. 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-- including retail investors -- own 14% 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.

Public Company Ownership

Public companies currently own 75% of GlaxoSmithKline Pharmaceuticals stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand GlaxoSmithKline Pharmaceuticals better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with GlaxoSmithKline Pharmaceuticals .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.