With 57% ownership of the shares, Hargreaves Lansdown plc (LON:HL.) is heavily dominated by institutional owners

In this article:

Key Insights

  • Given the large stake in the stock by institutions, Hargreaves Lansdown's stock price might be vulnerable to their trading decisions

  • A total of 7 investors have a majority stake in the company with 51% ownership

  • Recent purchases by insiders

To get a sense of who is truly in control of Hargreaves Lansdown plc ( LON:HL. ), it is important to understand the ownership structure of the business. With 57% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

In the chart below, we zoom in on the different ownership groups of Hargreaves Lansdown.

Check out our latest analysis for Hargreaves Lansdown

ownership-breakdown
LSE:HL. Ownership Breakdown April 6th 2024

What Does The Institutional Ownership Tell Us About Hargreaves Lansdown?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

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

earnings-and-revenue-growth
LSE:HL. Earnings and Revenue Growth April 6th 2024

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hargreaves Lansdown is not owned by hedge funds. Our data suggests that Peter Hargreaves, who is the company's co-founder, holds the most number of shares at 20%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 5.7% by the third-largest shareholder.