To get a sense of who is truly in control of Softline Holding PLC (), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 56% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.
In the chart below, we zoom in on the different ownership groups of Softline Holding.
What Does The Institutional Ownership Tell Us About Softline Holding?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
We can see that Softline Holding does have institutional investors; and they hold a good portion of the company’s stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Softline Holding’s earnings history below. Of course, the future is what really matters.
Softline Holding is not owned by hedge funds. From our data, we infer that the largest shareholder is Igor Borovikov (who also holds the title of Senior Key Executive) with 56% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we’re glad to see a company insider play the role of a key stakeholder. Meanwhile, the second and third largest shareholders, hold 9.4% and 3.1%, of the shares outstanding, respectively.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Softline Holding
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our information suggests that insiders own more than half of Softline Holding PLC. This gives them effective control of the company. So they have a US$117m stake in this US$208m business. Most would be pleased to see the board is investing alongside them. You may wish to
General Public Ownership
The general public, who are usually individual investors, hold a 25% stake in Softline Holding. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
It’s always worth thinking about the different groups who own shares in a company. But to understand Softline Holding better, we need to consider many other factors. For instance, we’ve identified that you should be aware of.
Of course this may not be the best stock to buy. So take a peek at this free
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.