Do Institutions Own Heritage Insurance Holdings, Inc. (NYSE:HRTG) Shares?

By
Simply Wall St
Published
July 29, 2021
NYSE:HRTG
Source: Shutterstock

Every investor in Heritage Insurance Holdings, Inc. (NYSE:HRTG) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. 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.

With a market capitalization of US$203m, Heritage Insurance Holdings is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Heritage Insurance Holdings.

View our latest analysis for Heritage Insurance Holdings

ownership-breakdown
NYSE:HRTG Ownership Breakdown July 29th 2021

What Does The Institutional Ownership Tell Us About Heritage Insurance 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.

Heritage Insurance Holdings 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 Heritage Insurance Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NYSE:HRTG Earnings and Revenue Growth July 29th 2021

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Heritage Insurance Holdings. Our data shows that BlackRock, Inc. is the largest shareholder with 9.3% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.5% and 5.2%, of the shares outstanding, respectively. In addition, we found that Ernesto Garateix, the CEO has 0.8% of the shares allocated to their name.

A closer look at our ownership figures suggests that the top 16 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Heritage Insurance 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.

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 Heritage Insurance Holdings, Inc.. It has a market capitalization of just US$203m, and insiders have US$22m 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

The general public holds a 15% stake in Heritage Insurance 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Heritage Insurance Holdings better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Heritage Insurance Holdings you should be aware of.

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.

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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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