If you want to know who really controls London Stock Exchange Group plc (LON: LSEG) then you will need to look at the makeup of its share register. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. Companies that were previously state-owned tend to have fewer insiders.
The London Stock Exchange Group has a market cap of £ 37 billion, so it’s too big to go unnoticed. We would expect institutions and retail investors to own a portion of the company. Looking at our data on ownership groups (below), it appears that institutions are visible on the share register. Let’s take a closer look at what different types of shareholders can tell us about the London Stock Exchange Group.
Check out our latest analysis for the London Stock Exchange Group
What does institutional ownership tell us about the London Stock Exchange Group?
Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
We can see that the London Stock Exchange Group has institutional investors; and they own a large portion of the company’s shares. This may indicate that the company has a certain degree of credibility in the investment community. However, it is better to be careful not to rely on the so-called validation that accompanies institutional investors. They too are sometimes wrong. If several institutions change their mind about a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out the London Stock Exchange Group profit history below. Of course, the future is what really matters.
Investors should note that institutions actually own more than half of the business, so they can collectively wield significant power. We note that hedge funds do not have a significant investment in the London Stock Exchange Group. Looking at our data, we can see that the largest shareholder is Refinitiv US Holdings Inc. with 22% of the shares outstanding. Meanwhile, the second and third largest shareholders hold 6.4% and 4.4% of the outstanding shares, respectively.
Upon closer inspection, we found that more than half of the company’s stock is owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are to some extent offset by the smaller ones.
While it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. Many analysts cover the stock, so it can be interesting to see what they are forecasting as well.
Insider ownership of the London Stock Exchange group
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own less than 1% of London Stock Exchange Group plc. We note, however, that it is possible that insiders may have an indirect interest through a private company or other corporate structure. Being so big, we wouldn’t expect insiders to own a large chunk of the shares. Collectively, they own £ 15million of shares. In this kind of situation, it may be more interesting to see if these insiders have bought or sold.
General public property
The general public, including retail investors, own a 16% stake in the company and therefore cannot be easily ignored. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.
Private equity firms have a 6.4% stake in the London Stock Exchange Group. This suggests that they can influence key policy decisions. Sometimes we see private equity sticking around for the long haul, but generally they have a shorter investment horizon and – as the name suggests – don’t invest much in public companies. After some time, they may look to sell and redeploy their capital elsewhere.
Owned by a private company
Our data indicates that private companies own 22% of the company’s shares. It might be worth pursuing the matter further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the business.
It’s always worth thinking about the different groups that own shares in a company. But to better understand the London Stock Exchange Group, there are many other factors that we need to consider. For example, we discovered 3 warning signs for the London Stock Exchange Group (1 is concerning!) Which you should know before investing here.
Ultimately the future is the most important. You can access this free analyst forecast report for the company.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St does not have any position in the mentioned stocks.
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