Do Insiders Own Lots Of Shares In Trinity Place Holdings Inc. (NYSEMKT:TPHS)?

If you want to know who really controls Trinity Place Holdings Inc. (NYSEMKT:TPHS), then you’ll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of 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.

Trinity Place Holdings is a smaller company with a market capitalization of US$43m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholder can tell us about Trinity Place Holdings.

Check out our latest analysis for Trinity Place Holdings

AMEX:TPHS Ownership Summary April 23rd 2020
AMEX:TPHS Ownership Summary April 23rd 2020

What Does The Institutional Ownership Tell Us About Trinity Place 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 Trinity Place Holdings does have institutional investors; and they hold 41% of the stock. 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. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Trinity Place Holdings’s historic earnings and revenue, below, but keep in mind there’s always more to the story.

AMEX:TPHS Income Statement April 23rd 2020
AMEX:TPHS Income Statement April 23rd 2020

Our data indicates that hedge funds own 21% of Trinity Place Holdings. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. The company’s largest shareholder is MFP Investors LLC, with ownership of 21%, The second and third largest shareholders are Third Avenue Management, LLC and Horse Island Asset Management, LLC, holding 19% and 5.7%, respectively.

On studying the facts and figures more closely, we found that the top 4 shareholders control 50% of the company which implies that this group has considerable sway over the company’s decision-making.

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. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Trinity Place Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

I can report that insiders do own shares in Trinity Place Holdings Inc.. In their own names, insiders own US$2.3m worth of stock in the US$43m company. This shows at least some alignment, but I usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, with a 32% stake in the company, will not easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Trinity Place Holdings better, we need to consider many other factors. Case in point: We’ve spotted 5 warning signs for Trinity Place Holdings you should be aware of, and 1 of them is potentially serious.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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