Key Insights

• Insiders appear to have a vested interest in Lovisa Holdings' growth, as seen by their sizeable ownership
• The top 3 shareholders own 50% of the company
• Recent sales by insiders

Every investor in Lovisa Holdings Limited (ASX:LOV) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Despite selling some shares recently, insiders control a good portion of the company's stock. As a result, the group bore the brunt of last week’s AU$380m market cap loss.

Let's take a closer look to see what the different types of shareholders can tell us about Lovisa Holdings.

View our latest analysis for Lovisa Holdings

What Does The Institutional Ownership Tell Us About Lovisa Holdings?

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.

As you can see, institutional investors have a fair amount of stake in Lovisa Holdings. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Lovisa Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Lovisa Holdings is not owned by hedge funds. Brett Blundy is currently the largest shareholder, with 39% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.1% and 5.3% of the stock. Furthermore, CEO Victor Herrero Amigo is the owner of 2.8% of the company's shares.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Lovisa Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Lovisa Holdings Limited. It is very interesting to see that insiders have a meaningful AU$1.3b stake in this AU$3.0b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Lovisa Holdings. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we've spotted with Lovisa Holdings .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.