The major groups of shareholders in WPP plc (LON: WPP) have power over the company. Institutions often own shares in more established companies, while it is not uncommon for insiders to own some smaller companies. Companies that were previously publicly owned tend to be less insider-owned.
With a market cap of £ 13bn, WPP is pretty big. We would expect to see institutional investors on the register. Companies of this size are also usually well known to private investors. In the graphic below we can see that institutions own shares in the company. Let’s dive deeper into each type of owner to learn more about WPP.
Check out our latest analysis for WPP
What does institutional ownership tell us about WPP?
Institutional investors often compare their own returns to the returns of a frequently tracked index. As a result, they typically consider buying larger companies that are included in the relevant benchmark index.
We see that WPP has institutional investors; and they hold a good chunk of the company’s stock. This suggests some credibility among professional investors. But we cannot rely on that alone, because institutions sometimes make bad investments, as everyone does. If several institutions change their minds about a share at the same time, the share price could fall quickly. So it’s worth checking out WPP’s earnings history below. Of course, the future is what really matters.
Institutional investors own over 50% of the company, so together they are likely to have a significant impact on board decisions. WPP is not owned by any hedge funds. BlackRock, Inc. is currently the company’s largest shareholder with 8.6% of the shares outstanding. The second and third largest shareholders now hold 4.3% and 4.2% of the outstanding shares, respectively.
A closer look at our ownership data reveals that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small shareholders where no single shareholder has a majority.
Studying institutional ownership is a great way to measure and filter the expected performance of a stock. The same can be achieved by examining the sentiments of the analysts. Quite a few analysts cover the stock so you can easily look at its forecasted growth.
Inside ownership of WPP
The definition of corporate insider can be subjective and varies depending on the legal system. Our data reflects individual insiders and at least includes board members. The company management is subordinate to the board of directors and this should represent the interests of the shareholders. It is noteworthy that sometimes top managers sit on the board themselves.
Most consider insider ownership to be a positive as it may indicate that the board is well aligned with other shareholders. However, sometimes too much power is concentrated within this group.
Our information suggests that WPP plc insiders own less than 1% of the company. Since we’re so big, we wouldn’t expect insiders to own a large stake in the stock. Together they own £ 22 million in shares. It is equally important to consider recent purchases and sales. You can click here to see if Insiders bought or sold.
General public property
With a share of 44%, the general public, which consists mainly of individual investors, has some influence on WPP. While this property size may not be sufficient to sway a political decision in their favor, they can still have a collective influence on company policy.
While it is worth considering a company’s different groups of owners, there are other factors that are even more important. For example we identified 2 warning signs for WPP that you should know.
But in the end it is the future, not the past that will determine how well the owners of this company will fare. Hence, we think it would be wise to take a look at this free report which shows whether analysts are predicting a brighter future.
Note: The numbers in this article are calculated using data from the past twelve months, which refers to the twelve month period ending on the last day of the month in which the financial statements are dated. This may not match the figures in the financial statements.
This article from Simply Wall St is of a general nature. We only provide comments based on historical data and analyst projections using an unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in any of the stocks mentioned.
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