key insights
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Significant control over Whitehaven Coal by private investors means the public has more power to influence management and governance decisions
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The top 25 shareholders own 43% of the company
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Insiders have recently bought
A look at Whitehaven Coal Limited (ASX:WHC)'s shareholders can tell us which group is the most powerful. We can see that retail investors own the largest stake in the company, accounting for his 52% ownership. That is, if the stock price rises, the group will gain the most (or if the stock price falls, it will suffer the maximum loss).
While individual investors' holdings took a hit after last week's 9.0% share price drop, institutional investors, who own 42% of the stock, were also hurt.
Let's take a closer look to see what different types of shareholders can tell us about Whitehaven Coal.
Check out our latest analysis for Whitehaven Coal.
What does institutional ownership tell us about Whitehaven Coal?
Many institutions measure performance based on indicators that approximate local markets. So they usually pay more attention to companies that are included in major indices.
We can see that Whitehaven Coal does have institutional investors. And they own a significant portion of the company's stock. This may indicate that the company has some credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They also sometimes make mistakes. 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 Whitehaven Coal, (below). Of course, keep in mind that there are other factors to consider as well.
Whitehaven Coal is not owned by hedge funds. Looking at the data, we can see that the largest shareholder is Dimensional Fund Advisors LP with his 5.7% of outstanding shares. Vanguard Group, Inc. is the second largest shareholder owning 5.0% of the common stock, and JPMorgan Chase & Co. Brokerage & Securities Investments owns approximately 4.4% of the company's stock.
Our research shows that the top 25 shareholders collectively control less than half of the company's shares. This means that the company's shares are widely distributed and there is no dominant shareholder.
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. Quite a few analysts cover this stock, so you can find out its expected growth quite easily.
Whitehaven Coal Insider Ownership
The precise definition of an insider can be subjective, but almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be members of the board of directors. This is especially true if the manager is the founder or CEO.
Most consider insider ownership a positive, because it can indicate the board is well aligned with other shareholders. However, in some cases, too much power may be concentrated within this group.
Our most recent data indicates that insiders own some shares in Whitehaven Coal Limited. This is a big company, so it's good to see this level of collaboration. Insiders own AU$115m worth of shares (at current prices). It's good to see this level of investment by insiders. Here you can see if insiders have been buying recently.
Open to the public
The general public, who are usually retail investors, own the equivalent of 52% of Whitehaven Call's shares, suggesting that Whitehaven Call is a fairly popular stock. With this level of ownership, individual investors can collectively play a role in decisions that affect shareholder returns, such as dividend policy and the appointment of directors. They also have the power to vote on acquisitions and mergers that may not improve profitability.
Private company ownership
Private companies appear to own 3.2% of the shares in Whitehaven Coal. Private companies may qualify as related parties. Insiders may have an interest in a public company through ownership in a private company rather than in their individual capacity. Although it is difficult to draw broad conclusions, it is worth noting as an area with room 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. For example, we identified 4 warning signs for Whitehaven Coal (Note that 2 cannot be ignored).
But in the end it's the futureIt, not the past, determines how well the owner of this business will do. So we might consider this free report showing whether analysts are predicting a bright future.
Note: The numbers in this article are calculated using data from the previous 12 months and refer to the 12-month period ending on the last day of the month in which the financial statements are dated. This may not match the 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 using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
