Institutional owners may ignore Hudson Technologies, Inc.'s (NASDAQ:HDSN) recent US$66m market cap decline as longer-term profits stay in the green

Key Insights

• Given the large stake in the stock by institutions, Hudson Technologies' stock price might be vulnerable to their trading decisions
• A total of 14 investors have a majority stake in the company with 52% ownership
• Insider ownership in Hudson Technologies is 12%

If you want to know who really controls Hudson Technologies, Inc. (NASDAQ:HDSN), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 74% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 14% last week. However, the 19% one-year return to shareholders may have helped lessen their pain. They should, however, be mindful of further losses in the future.

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

View our latest analysis for Hudson Technologies

What Does The Institutional Ownership Tell Us About Hudson Technologies?

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.

Hudson Technologies already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Hudson Technologies, (below). Of course, keep in mind that there are other factors to consider, too.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hudson Technologies is not owned by hedge funds. Ernest Lazarus is currently the largest shareholder, with 8.7% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 7.0% of common stock, and The Vanguard Group, Inc. holds about 4.9% of the company stock. Additionally, the company's CEO Brian Coleman directly holds 2.0% of the total shares outstanding.

Looking at the shareholder registry, we can see that 52% of the ownership is controlled by the top 14 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Hudson Technologies

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 Hudson Technologies, Inc.. Insiders have a US$54m stake in this US$446m business. 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 14% stake in Hudson Technologies. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hudson Technologies better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Hudson Technologies 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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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.