The large shareholder groups of Whispir Limited (ASX:WSP) have power over the company. Institutions often own shares in larger companies, and we expect to see insiders owning a noticeable percentage of smaller ones. I like to see at least a little insider ownership. As Charlie Munger said “Show me the incentive and I’ll show you the result”.
Whispir is a small company with a market capitalization of A$154 million, so it may still fly under the radar of many institutional investors. Our analysis of company ownership, below, shows that the institutions are visible on the share register. We can zoom in on the different ownership groups, to learn more about Whispir.
Check out our latest analysis for Whispir
What does institutional ownership tell us about Whispir?
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 Whispir has institutional investors; and they own a good part of the shares of the company. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out Whispir’s revenue history below. Of course, the future is what really matters.
Our data shows that hedge funds own 8.4% of Whispir. This is interesting because hedge funds can be very active and militant. Many are looking for medium-term catalysts that will drive the stock price higher. Looking at our data, we can see that the largest shareholder is CEO Jeromy Wells with 11% of the shares outstanding. With 8.4% and 8.0% of the outstanding shares respectively, Regal Funds Management Pty Limited and Pie Funds Management Ltd are the second and third largest shareholders.
Upon further inspection, we found that more than half of the company’s shares are held by the top 8 shareholders, suggesting that the interests of the larger shareholders are to some extent balanced by those of the smaller ones.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Whispir Insider Property
The definition of an insider may differ slightly from country to country, but board members still matter. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own a reasonable proportion of Whispir Limited. Insiders hold A$24 million worth of shares in the A$154 million company. We would say this shows alignment with shareholders, but it should be noted that the company is still quite small; some insiders may have founded the company. You can click here to see if these insiders have been buying or selling.
General public property
With a 40% stake, the general public, consisting mostly of individual investors, has some influence over Whispir. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
Private Company Ownership
It appears that private companies own 4.5% of Whispir’s shares. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
While it is worth considering the different groups that own a business, there are other, even more important factors. To this end, you should be aware of the 3 warning signs we spotted with Whispir.
If you prefer to find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.