What Type Of Shareholders Own The Most Number of Nathan's Famous, Inc. (NASDAQ:NATH) Shares?

The big shareholder groups in Nathan's Famous, Inc. (NASDAQ:NATH) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Nathan's Famous is not a large company by global standards. It has a market capitalization of US$239m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about Nathan's Famous.

Check out our latest analysis for Nathan's Famous

What Does The Institutional Ownership Tell Us About Nathan's Famous?

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.

Nathan's Famous already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Nathan's Famous' earnings history below. Of course, the future is what really matters.

Our data indicates that hedge funds own 12% of Nathan's Famous. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Nathan's Famous' case, its Top Key Executive, Howard Lorber, is the largest shareholder, holding 24% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.5% and 6.0% of the stock. In addition, we found that Eric Gatoff, the CEO has 1.9% of the shares allocated to their name.

Our research also brought to light the fact that roughly 50% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Nathan's Famous

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own a reasonable proportion of Nathan's Famous, Inc.. It has a market capitalization of just US$239m, and insiders have US$75m worth of shares in their own names. I 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

With a 19% ownership, the general public have some degree of sway over Nathan's Famous. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Nathan's Famous better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Nathan's Famous (of which 1 can't be ignored!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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. 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.
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