Key Insights
- Significant control over Whitehaven Coal by individual investors implies that the general public has more power to influence management and governance-related decisions
- 41% of the business is held by the top 25 shareholders
- Insiders have bought recently
To get a sense of who is truly in control of Whitehaven Coal Limited (ASX:WHC), it is important to understand the ownership structure of the business. With 54% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Institutions, on the other hand, account for 40% of the company’s stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
In the chart below, we zoom in on the different ownership groups of Whitehaven Coal.
Check out our latest analysis for Whitehaven Coal
What Does The Institutional Ownership Tell Us About Whitehaven Coal?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that Whitehaven Coal 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. 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 Whitehaven Coal’s earnings history below. Of course, the future is what really matters.
Whitehaven Coal is not owned by hedge funds. Dimensional Fund Advisors LP is currently the company’s largest shareholder with 5.7% of shares outstanding. With 5.2% and 4.4% of the shares outstanding respectively, The Vanguard Group, Inc. and JPMorgan Chase & Co, Brokerage and Securities Investments are the second and third largest shareholders.
Our studies suggest that the top 25 shareholders collectively control less than half of the company’s shares, meaning that the company’s shares are widely disseminated and there is no dominant shareholder.
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 Whitehaven Coal
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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.
Shareholders would probably be interested to learn that insiders own shares in Whitehaven Coal Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around AU$121m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.
General Public Ownership
The general public — including retail investors — own 54% of Whitehaven Coal. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Private Company Ownership
Our data indicates that Private Companies hold 3.2%, of the company’s shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We’ve spotted 2 warning signs for Whitehaven Coal you should be aware of, and 1 of them doesn’t sit too well with us.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss…
Read More: Whitehaven Coal Limited’s (ASX:WHC) top owners are individual investors with 54%