Key Insights
-
Somero Enterprises’ significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
-
A total of 25 investors have a majority stake in the company with 46% ownership
Every investor in Somero Enterprises, Inc. (LON:SOM) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion’s share in the company with 53% ownership. 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 47% of the company’s stockholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.
Let’s delve deeper into each type of owner of Somero Enterprises, beginning with the chart below.
View our latest analysis for Somero Enterprises
What Does The Institutional Ownership Tell Us About Somero Enterprises?
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 Somero Enterprises 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 Somero Enterprises’ historic earnings and revenue below, but keep in mind there’s always more to the story.
Somero Enterprises is not owned by hedge funds. Unicorn Asset Management Ltd. is currently the largest shareholder, with 5.2% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.8% and 4.6%, of the shares outstanding, respectively.
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 is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Somero Enterprises
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that Somero Enterprises, Inc. insiders own under 1% of the company. It has a market capitalization of just UK£152m, and the board has only UK£366k worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 53% stake in Somero Enterprises, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Somero Enterprises is showing 2 warning signs in our investment analysis , 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.
