Institutions' substantial holdings in Liberty TripAdvisor Holdings implies that they have significant influence over the company's share price
50% of the business is held by the top 20 shareholders
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
To get a sense of who is truly in control of Liberty TripAdvisor Holdings, Inc. (NASDAQ:LTRP.A), it is important to understand the ownership structure of the business. With 49% 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. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
In the chart below, we zoom in on the different ownership groups of Liberty TripAdvisor Holdings.
What Does The Institutional Ownership Tell Us About Liberty TripAdvisor 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 Liberty TripAdvisor 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. 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 Liberty TripAdvisor Holdings' earnings history below. Of course, the future is what really matters.
NasdaqGS:LTRP.A Earnings and Revenue Growth July 2nd 2023
Hedge funds don't have many shares in Liberty TripAdvisor Holdings. Looking at our data, we can see that the largest shareholder is Crimson Asset Management Ltd. with 6.8% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.0% and 5.3%, of the shares outstanding, respectively. Furthermore, CEO Gregory Maffei is the owner of 4.7% of the company's shares.
A closer look at our ownership figures suggests that the top 20 shareholders have a combined ownership of 50% implying that 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 as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Liberty TripAdvisor Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Shareholders would probably be interested to learn that insiders own shares in Liberty TripAdvisor Holdings, Inc.. It has a market capitalization of just US$222m, and insiders have US$12m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
With a 45% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Liberty TripAdvisor 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 1 warning sign for Liberty TripAdvisor Holdings that you should be aware of.
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.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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