Key Insights

• Insiders appear to have a vested interest in Netwealth Group's growth, as seen by their sizeable ownership
• The top 2 shareholders own 52% of the company
• Institutional ownership in Netwealth Group is 17%

A look at the shareholders of Netwealth Group Limited (ASX:NWL) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 48% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

So it follows, every decision made by insiders of Netwealth Group regarding the company's future would be crucial to them.

Let's delve deeper into each type of owner of Netwealth Group, beginning with the chart below.

See our latest analysis for Netwealth Group

What Does The Institutional Ownership Tell Us About Netwealth Group?

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.

As you can see, institutional investors have a fair amount of stake in Netwealth Group. 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. 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 Netwealth Group, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Netwealth Group. The company's largest shareholder is Michael Heine, with ownership of 46%. In comparison, the second and third largest shareholders hold about 5.2% and 2.2% of the stock. Furthermore, CEO Matthew Alexander Heine is the owner of 1.3% of the company's shares.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Netwealth Group

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.

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 insiders maintain a significant holding in Netwealth Group Limited. Insiders own AU$3.7b worth of shares in the AU$7.8b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 35% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Netwealth Group better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Netwealth Group you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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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.