A look at the shareholders of American Financial Group, Inc. (NYSE: AFG) shows which group is the most powerful. Institutions often hold stocks in larger companies, and we expect insiders to own a significant percentage of the smaller companies. I generally like to see some level of inside ownership, if just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your portfolio.
With a market cap of $ 7.5 billion, the American Financial Group is pretty big. We would expect to see institutional investors on the register. Companies of this size are usually also known to private investors. A look at our data on the owner groups (see below) shows that institutions own shares in the company. We can expand the various groups of owners to learn more about the American Financial Group.
Check out our latest analysis for the American Financial Group
NYSE: AFG Ownership Breakdown on December 29, 2020
What does institutional ownership tell us about American Financial Group?
Many institutions measure their performance against an index that approximates the local market. As a result, they tend to pay more attention to companies included in major indices.
As you can see, institutional investors have a reasonable stake in the American Financial Group. This suggests some credibility with professional investors. But we cannot rely on this fact alone, as institutions sometimes make bad investments, as everyone does. If several institutions change their view of a share at the same time, the share price can fall quickly. It is therefore worth looking at the American Financial Group’s earnings history below. Of course, the future is what really matters.
NYSE: AFG earnings and revenue growth December 29, 2020
Institutional investors own over 50% of the company, so together they are likely to have a significant influence on the decisions of the board of directors. Hedge funds don’t have a lot of stakes in American Financial Group. Because actions speak louder than words, we consider it a good sign when insiders have a significant stake in a company. In the case of the American Financial Group, Co-Chief Executive Officer Carl Lindner is the largest shareholder with 13% of the shares issued. Vanguard Group, Inc. is the second largest shareholder with 8.5% of the common stock, and BlackRock, Inc. holds approximately 7.7% of the company’s stock. In addition, CEO Stephen Lindner owns 5.6% of the company’s shares.
We continued digging and found that 9 of the top shareholders make up around 51% of the register, which means there are some smaller shareholders alongside larger shareholders, which somewhat balances the interests of the others.
While studying a company’s institutional ownership can add value to your research, researching analyst recommendations to get a deeper understanding of a stock’s expected performance is also good practice. Quite a few analysts cover the stock, so it’s easy to see forecasted growth.
American Financial Group insider property
While the exact definition of an insider can be subjective, almost every board member considers an insider. Management ultimately replies to the board. However, it’s not uncommon for managers to be board members, especially if they’re founders or CEOs.
I generally think insider ownership is a good thing. In some cases, however, it is more difficult for other shareholders to hold the board of directors accountable for decisions.
It appears that insiders own a significant stake in American Financial Group, Inc. It’s very interesting to see that insiders have a significant $ 1.5 billion stake in this $ 7.5 billion business. Most would be happy if the board of directors invested alongside them. You may want to access this free chart showing recent trading from insiders.
General public property
The general public has a 14% stake in the American Financial Group. While this size of property is substantial, it may not be enough to change company policy if the decision does not coincide with other major shareholders.
While it is worth looking at the different groups that own a business, there are other factors that are even more important. For example we discovered 5 warning signs for the American Financial Group You should know this before investing here.
But in the end It’s the future, not the past that will determine how well the owners of this business will perform. Hence, we think it would be wise to take a look at this free report which shows whether analysts are predicting a brighter future.
NB: The figures in this article are calculated using data from the last twelve months, which refers to the twelve month period ending on the last date of the month in which the financial statements are dated. This may not match the figures in the annual report for the full year.
When trading with the American Financial Group or any other investment, use what is considered by many to be the professional’s gateway to the world market, Interactive Brokers. Get the most affordable * trading in stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.
This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. We want to provide you with a long-term, focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.
* Interactive brokers have been rated as Lowest Cost Brokers by StockBrokers.com. Annual online review 2020
Do you have any feedback on this article? Concerned about the content? Get in touch directly with us. Alternatively, you can also send an email to the editorial team (at) simplywallst.com.