Key Insights
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Significant control over Workhorse Group by individual investors implies that the general public has more power to influence management and governance-related decisions
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33% of the business is held by the top 25 shareholders
Every investor in Workhorse Group Inc. (NASDAQ:WKHS) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While institutions, who own 33% shares weren’t spared from last week’s US$17m market cap drop, individual investors as a group suffered the maximum losses
In the chart below, we zoom in on the different ownership groups of Workhorse Group.
Check out our latest analysis for Workhorse Group
What Does The Institutional Ownership Tell Us About Workhorse Group?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Workhorse Group does have institutional investors; and they hold a good portion of the company’s stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Workhorse Group’s historic earnings and revenue below, but keep in mind there’s always more to the story.
Workhorse Group is not owned by hedge funds. The company’s largest shareholder is BlackRock, Inc., with ownership of 7.1%. With 5.2% and 4.6% of the shares outstanding respectively, The Vanguard Group, Inc. and Invesco Capital Management LLC are the second and third largest shareholders. Additionally, the company’s CEO Richard Dauch directly holds 1.9% of the total shares outstanding.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Workhorse Group
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
We can see that insiders own shares in Workhorse Group Inc.. It has a market capitalization of just US$160m, and insiders have US$7.2m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 57% of Workhorse Group shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we’ve spotted 4 warning signs for Workhorse Group (of which 1 is concerning!) you should know about.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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