Institutional investors must be pleased after a 4.7% gain last week that adds to H&E Equipment Services, Inc.'s (NASDAQ:HEES) one-year returns

Key Insights

• Institutions' substantial holdings in H&E Equipment Services implies that they have significant influence over the company's share price
• 51% of the business is held by the top 14 shareholders
• Insiders have sold recently

If you want to know who really controls H&E Equipment Services, Inc. (NASDAQ:HEES), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 78% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, institutional investors ended up benefitting the most after the company hit US$1.6b in market cap. One-year return to shareholders is currently 5.8% and last week’s gain was the icing on the cake.

Let's delve deeper into each type of owner of H&E Equipment Services, beginning with the chart below.

Check out our latest analysis for H&E Equipment Services

What Does The Institutional Ownership Tell Us About H&E Equipment Services?

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.

H&E Equipment Services already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 H&E Equipment Services' earnings history below. Of course, the future is what really matters.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in H&E Equipment Services. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 9.8%. For context, the second largest shareholder holds about 7.3% of the shares outstanding, followed by an ownership of 7.2% by the third-largest shareholder. Furthermore, CEO Bradley Barber is the owner of 0.6% of the company's shares.

Looking at the shareholder registry, we can see that 51% 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 H&E Equipment Services

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.

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.

We can report that insiders do own shares in H&E Equipment Services, Inc.. The insiders have a meaningful stake worth US$116m. Most would see this as a real positive. 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

With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over H&E Equipment Services. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 3 warning signs we've spotted with H&E Equipment Services .

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.