What you need to know about Whitbread plc (LON:WTB) investor composition

Whitbread plc (LON:WTB)’s major shareholder groups have power over the company. Institutions often own stakes in more established companies, while it is not uncommon for insiders to own some smaller companies. We also tend to see less insider ownership in companies that were previously publicly owned.

Whitbread has a market cap of £6.3 billion, so it’s too big to fly under the radar. We expect both institutions and individual investors to own part of the company. Our analysis of company ownership below shows that institutions own shares in the company. We can zoom in on the different ownership groups to learn more about Whitbread.

Check out our latest analysis for Whitbread

LSE: WTB Ownership Breakdown January 14, 2022

What does institutional ownership tell us about Whitbread?

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.

Whitbread already has institutions on the share register. In fact, they own a respectable stake in the company. 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. When multiple institutions own a stock, there is always a risk that they will find themselves in a “crowded trade”. When such a trade goes awry, multiple parties can compete to sell shares quickly. This risk is higher in a company without a growth history. You can see Whitbread’s historical earnings and earnings below, but remember there’s still more to be told.

Profit and Revenue Growth
LSE: WTB Earnings and Revenue Growth Jan 14, 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 Whitbread. BlackRock, Inc. is currently the company’s largest shareholder with 7.3% of outstanding shares. In comparison, the second- and third-largest shareholders hold around 4.3% and 3.6% of the shares, respectively.

If we look at the register of shareholders, we can see that 50% of the ownership is controlled by the 21 largest shareholders, meaning that no single shareholder has a controlling interest in the property.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiment to know which way the wind is blowing. Quite a few analysts cover the stock, so you can easily look at the projected growth.

Insider ownership of Whitbread

The definition of corporate insider can be subjective and varies by jurisdiction. Our data reflects individual insiders and captures at least board members. Management runs the business, but the CEO is accountable to the board even if he or she is a member.

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 information suggests that Whitbread plc insiders own less than 1% of the company. It’s a very large company, so it would be surprising to see insiders own a large portion of the company. Although their stake is less than 1%, we can see that the board members collectively own £6.1m worth of shares (at current prices). It’s good to see board members own shares, but it might be worth checking to see if those insiders bought.

General Public Property

The general public, who are typically individual investors, own a 13% stake in Whitbread. While this ownership may not be sufficient to influence 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.

I like to dive deeper how a company has developed in the past. In it you will find historical earnings and earnings detailed graphics.

If you’d rather learn what analysts are predicting for future growth, don’t miss this one for free Analyst forecast report.

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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