The big institutional owners of Hostelworld Group plc (LON:HSW) have to be pleased as the stock continues to impress, climbing 11% over the past week

If you want to know who really controls Hostelworld Group plc (LON:HSW) then you need to look at the composition of the share register. The group with the most shares in the company, around 72%, are institutions. In other words, the group will gain the most (or lose the most) from their investment in the company.

And last week institutional investors benefited the most after the company hit a market cap of £101 million. The one-year return for shareholders is currently 12%, and last week’s gain was the icing on the cake.

Let’s take a closer look at what the different types of shareholders can tell us about Hostelworld Group.

Check out our latest analysis for Hostelworld Group

LSE:HSW ownership breakdown February 16, 2022

What does institutional ownership tell us about Hostelworld Group?

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 Hostelworld Group 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 taking a look at the earnings history of Hostelworld Group. Of course, what really matters is the future.

LSE:HSW earnings and revenue growth February 16, 2022

Investors should note that institutions actually own more than half of the company, so collectively they can wield significant power. We find that hedge funds have no meaningful investment in Hostelworld Group. Aberforth Partners LLP is currently the largest shareholder with 18% of the outstanding shares. Premier Fund Managers Limited and Gresham House Asset Management Limited are the second and third largest shareholders with 12% and 7.8% of the outstanding shares respectively.

Upon closer inspection, we found that the top 7 shareholders own more than half of the company’s shares, suggesting that the interests of the larger shareholders are to some extent balanced by the smaller ones.

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 many analysts covering the stock, so it might be worth seeing what they’re forecasting as well.

Insider property of Hostelworld Group

The definition of corporate insider can be subjective and varies by jurisdiction. Our data reflects individual insiders and captures at least board members. 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.

In general, I think insider ownership is a good thing. In some cases, however, it becomes more difficult for other shareholders to hold the board accountable for decisions.

Our latest data shows that insiders own some shares in Hostelworld Group plc. Insiders own £1.5m worth of shares in the £101m company in their own name. Some would say this shows an alignment of interests between shareholders and the board, although we generally prefer larger insider holdings. But it might be worth checking to see if those insiders have sold.

General Public Property

The general public — including retail investors — own 18% of the company, so it can’t be ignored. While this ownership size is substantial, it may not be enough to change company policy if the decision is not aligned with other major shareholders.

Private Equity Ownership

With a 7.8% stake, private equity firms could influence the board of the Hostelworld group. Some might like that because sometimes private equity are activists who hold management accountable. But sometimes private equity sells out after the company goes public.

Next Steps:

I find it very interesting to see who exactly owns a company. But to really gain insight, we need to consider other information as well. For example, we have identified 1 warning sign for Hostelworld Group that you should be aware of.

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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