Insiders still control 71% of Freedom Holding Corp. (NASDAQ:FRHC) despite recent sales

Key Insights

• Insiders appear to have a vested interest in Freedom Holding's growth, as seen by their sizeable ownership
• The largest shareholder of the company is Timur Turlov with a 70% stake
• Insiders have sold recently

A look at the shareholders of Freedom Holding Corp. (NASDAQ:FRHC) can tell us which group is most powerful. The group holding the most number of shares in the company, around 71% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Insiders own the top position in the company’s share registry despite recent sales and as a result, were the biggest beneficiaries of last week’s 3.0% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Freedom Holding.

View our latest analysis for Freedom Holding

What Does The Lack Of Institutional Ownership Tell Us About Freedom Holding?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Freedom Holding might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Hedge funds don't have many shares in Freedom Holding. The company's CEO Timur Turlov is the largest shareholder with 70% of shares outstanding. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. With 0.3% and 0.2% of the shares outstanding respectively, Zhumagulov Bolatovich and Kairat Akhmetov are the second and third largest shareholders. Interestingly, the second-largest shareholder, Zhumagulov Bolatovich is also Other Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Freedom Holding

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 the majority of Freedom Holding Corp.. This means they can collectively make decisions for the company. That means insiders have a very meaningful US$5.8b stake in this US$8.2b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Freedom Holding. 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 Freedom Holding better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Freedom Holding .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.