Stock Analysis

What Kind Of Investors Own Most Of Lakeland Industries, Inc. (NASDAQ:LAKE)?

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NasdaqGM:LAKE
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If you want to know who really controls Lakeland Industries, Inc. (NASDAQ:LAKE), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.

Lakeland Industries is a smaller company with a market capitalization of US$283m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Lakeland Industries.

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ownership-breakdown
NasdaqGM:LAKE Ownership Breakdown February 22nd 2021

What Does The Institutional Ownership Tell Us About Lakeland 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.

We can see that Lakeland Industries 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. 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 Lakeland Industries' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NasdaqGM:LAKE Earnings and Revenue Growth February 22nd 2021

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. It would appear that 9.3% of Lakeland Industries shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that Renaissance Technologies Corp. is the largest shareholder with 9.3% of shares outstanding. With 9.1% and 7.1% of the shares outstanding respectively, Wellington Management Group LLP and BlackRock, Inc. are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Lakeland Industries

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.

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.

I can report that insiders do own shares in Lakeland Industries, Inc.. It has a market capitalization of just US$283m, and insiders have US$7.4m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 22% ownership, the general public have some degree of sway over Lakeland 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. For example, we've discovered 3 warning signs for Lakeland Industries (1 shouldn't be ignored!) that you should be aware of before investing here.

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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