Key Insights

• Significant insider control over Tootsie Roll Industries implies vested interests in company growth
• The largest shareholder of the company is Ellen Gordon with a 54% stake
• 16% of Tootsie Roll Industries is held by Institutions

Every investor in Tootsie Roll Industries, Inc. (NYSE:TR) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 65% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week’s 4.0% gain.

In the chart below, we zoom in on the different ownership groups of Tootsie Roll Industries.

Check out our latest analysis for Tootsie Roll Industries

What Does The Institutional Ownership Tell Us About Tootsie Roll Industries?

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.

Tootsie Roll Industries already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Tootsie Roll Industries' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Tootsie Roll Industries. Looking at our data, we can see that the largest shareholder is the CEO Ellen Gordon with 54% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. Leigh Weiner is the second largest shareholder owning 7.7% of common stock, and Virginia Gordon holds about 3.2% of the company stock. Interestingly, the third-largest shareholder, Virginia Gordon is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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 Tootsie Roll Industries

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.

Our most recent data indicates that insiders own the majority of Tootsie Roll Industries, Inc.. This means they can collectively make decisions for the company. Insiders own US$1.5b worth of shares in the US$2.3b company. That's extraordinary! Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Tootsie Roll Industries. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.