The Warehouse Group Limited's (NZSE:WHS) market cap dropped NZ$52m last week; Retail investors bore the brunt

Key Insights

• The considerable ownership by retail investors in Warehouse Group indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 4 shareholders
• 29% of Warehouse Group is held by insiders

Every investor in The Warehouse Group Limited (NZSE:WHS) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion's share in the company with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders who own 29% came under pressure after market cap dropped to NZ$380m last week,retail investors took the most losses.

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

See our latest analysis for Warehouse Group

What Does The Institutional Ownership Tell Us About Warehouse Group?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

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

We note that hedge funds don't have a meaningful investment in Warehouse Group. Stephen Tindall is currently the largest shareholder, with 28% of shares outstanding. With 21% and 0.7% of the shares outstanding respectively, The Tindall Foundation Inc., Endowment Arm and BlackRock, Inc. are the second and third largest shareholders.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 Warehouse Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in The Warehouse Group Limited. Insiders have a NZ$111m stake in this NZ$380m business. 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

The general public-- including retail investors -- own 46% stake in the company, and hence can't easily be ignored. 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 Warehouse Group better, we need to consider many other factors. For instance, we've identified 3 warning signs for Warehouse Group (1 is a bit unpleasant) that you should be aware of.

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.

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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.