Flexsteel Industries, Inc.'s (NASDAQ:FLXS) large institutional owners must be happy as stock continues to impress, up 29% over the past week

Key Insights

• Significantly high institutional ownership implies Flexsteel Industries' stock price is sensitive to their trading actions
• A total of 11 investors have a majority stake in the company with 51% ownership
• Insiders have sold recently

Every investor in Flexsteel Industries, Inc. (NASDAQ:FLXS) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 43% 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$222m in market cap. One-year return to shareholders is currently 181% and last week’s gain was the icing on the cake.

In the chart below, we zoom in on the different ownership groups of Flexsteel Industries.

Check out our latest analysis for Flexsteel Industries

What Does The Institutional Ownership Tell Us About Flexsteel Industries?

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.

As you can see, institutional investors have a fair amount of stake in Flexsteel Industries. 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 Flexsteel Industries' earnings history below. Of course, the future is what really matters.

Flexsteel Industries is not owned by hedge funds. The company's largest shareholder is Dimensional Fund Advisors LP, with ownership of 7.5%. In comparison, the second and third largest shareholders hold about 6.3% and 6.0% of the stock. Furthermore, CEO Derek Schmidt is the owner of 3.9% of the company's shares.

After doing some more digging, we found that the top 11 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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 Flexsteel Industries

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.

It seems insiders own a significant proportion of Flexsteel Industries, Inc.. Insiders own US$67m worth of shares in the US$222m company. 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

With a 27% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Flexsteel Industries. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Flexsteel Industries you should know about.

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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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.