Erie Indemnity Company (NASDAQ:ERIE) insiders have significant skin in the game with 41% ownership

Key Insights

• Significant insider control over Erie Indemnity implies vested interests in company growth
• The top 3 shareholders own 52% of the company
• Institutional ownership in Erie Indemnity is 34%

Every investor in Erie Indemnity Company (NASDAQ:ERIE) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

So it follows, every decision made by insiders of Erie Indemnity regarding the company's future would be crucial to them.

In the chart below, we zoom in on the different ownership groups of Erie Indemnity.

View our latest analysis for Erie Indemnity

What Does The Institutional Ownership Tell Us About Erie Indemnity?

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 Erie Indemnity 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. 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 Erie Indemnity's earnings history below. Of course, the future is what really matters.

Erie Indemnity is not owned by hedge funds. The company's largest shareholder is Thomas Hagen, with ownership of 33%. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 7.6% by the third-largest shareholder. Elizabeth Ann Vorsheck, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Erie Indemnity

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Erie Indemnity Company. It is very interesting to see that insiders have a meaningful US$8.9b stake in this US$22b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in Erie Indemnity. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow.

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.