Is FRP Holdings, Inc.'s (NASDAQ:FRPH) Shareholder Ownership Skewed Towards Insiders?

By
Simply Wall St
Published
March 11, 2021
NasdaqGS:FRPH

A look at the shareholders of FRP Holdings, Inc. (NASDAQ:FRPH) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

FRP Holdings is not a large company by global standards. It has a market capitalization of US$476m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about FRP Holdings.

View our latest analysis for FRP Holdings

ownership-breakdown
NasdaqGS:FRPH Ownership Breakdown March 11th 2021

What Does The Institutional Ownership Tell Us About FRP 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.

As you can see, institutional investors have a fair amount of stake in FRP Holdings. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 FRP Holdings' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGS:FRPH Earnings and Revenue Growth March 11th 2021

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. FRP Holdings is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO John Baker with 15% of shares outstanding. Charles D. Hyman & Company is the second largest shareholder owning 10% of common stock, and Cynthia Ogden holds about 9.8% of the company stock.

We did some more digging and found that 6 of the top shareholders account for roughly 54% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of FRP Holdings

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of FRP Holdings, Inc.. Insiders have a US$181m stake in this US$476m business. 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 12% stake in FRP Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with FRP Holdings (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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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