Every investor in Pershing Square Tontine Holdings, Ltd. (NYSE: PSTH) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that have been privatized tend to have low insider ownership.
Pershing Square Tontine Holdings has a market capitalization of US$5.0b, so it’s too big to fly under the radar. We’d expect to see both institutions and retail investors owning a portion of the company. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let’s delve deeper into each type of owner, to discover more about Pershing Square Tontine Holdings.
What Does The Institutional Ownership Tell Us About Pershing Square Tontine 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.
Pershing Square Tontine Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Pershing Square Tontine Holdings’ earnings history below. Of course, the future is what really matters.
It would appear that 6.4% of Pershing Square Tontine Holdings shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. The company’s largest shareholder is Guggenheim Partners, LLC, with ownership of 11%. With 6.4% and 5.7% of the shares outstanding respectively, The Baupost Group, LLC and Ontario Teachers’ Pension Plan Board are the second and third largest shareholders.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of smallholders where no single shareholder has a majority.
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. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Pershing Square Tontine Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 less than 1% of Pershing Square Tontine Holdings, Ltd.. Keep in mind that it’s a big company, and the insiders own US$7.9m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.
General Public Ownership
With a 44% ownership, the general public has some degree of sway over Pershing Square Tontine 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.