Institutional investors are Eleco Plc’s (LON:ELCO) biggest bookies and have been rewarded after last week’s £14m market cap gain

Any investor in Eleco Plc (LON:ELCO) should be aware of the most powerful shareholder groups. We can see that institutions own the lion’s share of the company at 55%. In other words, the group is exposed to maximum upside (or downside risk).

And last week institutional investors benefited the most after the company hit a market cap of £90m. The one-year return for shareholders is currently 29%, and last week’s gain was the icing on the cake.

Let’s dive deeper into each Eleco owner type, starting with the table below.

Check out our latest analysis for Eleco

AIM:ELCO Ownership Breakdown January 13, 2022

What Does Institutional Ownership Tell Us About Eleco?

Many institutions measure their performance against an index that approximates the local market. As a result, they tend to pay more attention to companies that are included in major indices.

We can see that Eleco has institutional investors; and they hold a good portion of the company’s stock. This may indicate that the company has a certain level of credibility in the investor community. However, it’s best not to rely on the supposed confirmation that comes from institutional investors. They too are sometimes wrong. If several institutes change their opinion on a stock at the same time, the share price could fall quickly. It is therefore worth checking out Eleco’s earnings history below. Of course, what really matters is the future.

Profit and Revenue Growth
AIM: ELCO profit and sales growth January 13, 2022

Investors should note that institutions actually own more than half of the company, so collectively they can wield significant power. Eleco is not owned by hedge funds. The company’s largest shareholder is John Henry Ketteley with an 11% stake. In comparison, the second- and third-largest shareholders hold around 9.3% and 6.6% of the shares, respectively.

We have also observed that the top 8 shareholders make up more than half of the share register, with some smaller shareholders balancing the interests of the larger ones to some degree.

While examining a company’s institutional ownership can add value to your research, it’s also a good practice to research analyst recommendations to gain a deeper understanding of a stock’s expected performance. There are a fair number of analysts covering the stock, so it might be helpful to get their overall view on the future.

Insider ownership of Eleco

The definition of an insider may differ slightly from country to country, but board members always count. Management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.

Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. In some cases, however, too much power is concentrated within this group.

Our latest data shows that insiders own a reasonable stake in Eleco Plc. Insiders own £21m worth of shares in the £90m company. It’s great to see insiders so invested in the business. It might be worth checking if these insiders have bought recently.

General Public Property

The general public, who are typically individual investors, own a 19% stake in Eleco. While this ownership may not be sufficient to sway a policy decision in their favor, they can still collectively influence company policy.

Next Steps:

While it’s worth considering the different groups that own a business, there are other factors that are even more important. Note that Eleco is shown 1 warning sign in our investment analysis , you should know that…

If you’re like me, you might want to think about whether this company is going to grow or shrink. Luckily, you can check out this free report that includes analyst forecasts for the future.

Note: The figures in this article are calculated using data for the last twelve months, relating to the 12-month period ending on the last date of the month to which the financial statements are dated. This may not tally with the annual report figures for the full year.

This Simply Wall St article is of a general nature. We provide comments based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.

About Nina Snider

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