Key Insights
- The considerable ownership by individual investors in Gladstone Commercial indicates that they collectively have a greater say in management and business strategy
- 41% of the business is held by the top 25 shareholders
- Insiders have been buying lately
A look at the shareholders of Gladstone Commercial Corporation (NASDAQ:GOOD) can tell us which group is most powerful. With 51% stake, individual investors 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).
Following a 11% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 48% stock also took a hit.
In the chart below, we zoom in on the different ownership groups of Gladstone Commercial.
See our latest analysis for Gladstone Commercial
What Does The Institutional Ownership Tell Us About Gladstone Commercial?
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 Gladstone Commercial. 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 Gladstone Commercial, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in Gladstone Commercial. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 9.7%. In comparison, the second and third largest shareholders hold about 8.7% and 3.2% of the stock. Additionally, the company's CEO David Gladstone directly holds 1.1% of the total shares outstanding.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Gladstone Commercial
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.
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.
We can see that insiders own shares in Gladstone Commercial Corporation. It has a market capitalization of just US$618m, and insiders have US$8.0m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 51% stake in Gladstone Commercial, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Gladstone Commercial better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Gladstone Commercial (including 1 which makes us a bit uncomfortable) .
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.