boohoo group plc's (LON:BOO) market cap dropped UK£158m last week; individual investors who hold 45% were hit as were institutions
Every investor in boohoo group plc (LON:BOO) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While institutions who own 31% came under pressure after market cap dropped to UK£600m last week,individual investors took the most losses.
In the chart below, we zoom in on the different ownership groups of boohoo group.
Check out our latest analysis for boohoo group
What Does The Institutional Ownership Tell Us About boohoo group?
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 boohoo group. 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. 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 boohoo group's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in boohoo group. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In boohoo group's case, its Top Key Executive, Mahmud Kamani, is the largest shareholder, holding 16% of shares outstanding. With 5.1% and 5.0% of the shares outstanding respectively, T. Rowe Price Group, Inc. and Invesco Ltd. are the second and third largest shareholders.
We did some more digging and found that 10 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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 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 boohoo group
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 boohoo group plc. Insiders have a UK£140m stake in this UK£600m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 45% stake in boohoo group. 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 boohoo group better, we need to consider many other factors. For example, we've discovered 1 warning sign for boohoo group that you should be aware of before investing here.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.
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