- United States
- Diversified Financial
Private equity firms are Guild Holdings Company's (NYSE:GHLD) biggest owners and were hit after market cap dropped US$64m
- Significant control over Guild Holdings by private equity firms implies that the general public has more power to influence management and governance-related decisions
- 66% of the company is held by a single shareholder (McCarthy Partners Management, LLC)
- Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
A look at the shareholders of Guild Holdings Company (NYSE:GHLD) can tell us which group is most powerful. We can see that private equity firms own the lion's share in the company with 66% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And last week, private equity firms endured the biggest losses as the stock fell by 9.5%.
Let's take a closer look to see what the different types of shareholders can tell us about Guild Holdings.
See our latest analysis for Guild Holdings
What Does The Institutional Ownership Tell Us About Guild Holdings?
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.
We can see that Guild Holdings does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Guild Holdings, (below). Of course, keep in mind that there are other factors to consider, too.
Guild Holdings is not owned by hedge funds. McCarthy Partners Management, LLC is currently the largest shareholder, with 66% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Mcgarry Strategic Enterprises, Llc is the second largest shareholder owning 7.2% of common stock, and Terry Schmidt holds about 3.9% of the company stock. Terry Schmidt, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Guild Holdings
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.
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.
Shareholders would probably be interested to learn that insiders own shares in Guild Holdings Company. As individuals, the insiders collectively own US$51m worth of the US$611m company. 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
The general public, who are usually individual investors, hold a 11% stake in Guild Holdings. 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.
Private Equity Ownership
Private equity firms hold a 66% stake in Guild Holdings. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Private Company Ownership
Our data indicates that Private Companies hold 7.2%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
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. Take risks for example - Guild Holdings has 2 warning signs (and 1 which is concerning) we think you should know about.
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.
Valuation is complex, but we're helping make it simple.
Find out whether Guild Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Guild Holdings Company originates, sells, and services residential mortgage loans in the United States.
Undervalued with proven track record.