Insiders have been selling Erie Indemnity Company (NASDAQ:ERIE) recently yet still hold a significant stake; 5.8% drop last week not ideal

Key Insights

• Insiders appear to have a vested interest in Erie Indemnity's growth, as seen by their sizeable ownership
• A total of 3 investors have a majority stake in the company with 53% ownership
• Insiders have sold recently

A look at the shareholders of Erie Indemnity Company (NASDAQ:ERIE) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And our data suggests that insiders own the top position in the company’s share registry despite recent sales. As market cap fell to US$23b last week, they would have faced the highest losses than any other shareholder groups of the company.

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

Check out 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.

Erie Indemnity 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. 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 Erie Indemnity, (below). Of course, keep in mind that there are other factors to consider, too.

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 9.4% by the third-largest shareholder.

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 53% stake.

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 Erie Indemnity

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.

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.

It seems insiders own a significant proportion of Erie Indemnity Company. It is very interesting to see that insiders have a meaningful US$9.5b stake in this US$23b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Erie Indemnity. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 11%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

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

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.