How much of Terran Orbital Corporation (NYSE:LLAP) do insiders own?

The large shareholder groups of Terran Orbital Corporation (NYSE:LLAP) have power over the company. Big companies usually have institutions as shareholders, and we usually see insiders owning shares in small companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet”.

Terran Orbital has a market cap of US$854 million, so we expect some institutional investors to have taken notice of the stock. In the graph below, we can see that the institutions are not really present on the share register. We can zoom in on the different ownership groups, to learn more about Terran Orbital.

See our latest analysis for Terran Orbital

NYSE: LLAP Ownership Breakdown April 11, 2022

What does institutional ownership tell us about Terran Orbital?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

Institutions have a very small stake in Terran Orbital. This indicates that the company is on the radar of some funds, but it is not particularly popular with professional investors at the moment. So if the business itself can improve over time, we may well see more institutional buyers in the future. When several institutional investors wish to buy shares, we often see a rise in the price of the share. Past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

NYSE: LLAP Earnings and Revenue Growth April 11, 2022

Our data indicates that hedge funds own 16% of Terran Orbital. This catches my attention because hedge funds sometimes try to influence management or make changes that will create short-term shareholder value. Beach Point Capital Management LP is currently the company’s largest shareholder with 16% of the shares outstanding. In comparison, the second and third shareholders hold approximately 9.7% and 8.9% of the shares. Daniel Staton, who is the third shareholder, also holds the title of vice-president.

We dug a little deeper and found that 7 of the major shareholders make up about 50% of the register, implying that along with the large shareholders, there are a few smaller shareholders, thus balancing everyone’s interests somewhat.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.

Terran Orbital Insider Property

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Our information suggests that insiders hold a significant stake in Terran Orbital Corporation. Insiders have a $173 million stake in the $854 million business. It’s great to see insiders so invested in the company. It might be worth checking to see if these insiders have bought recently.

General public property

The general public, including retail investors, owns 50% of the company’s capital and therefore cannot be easily ignored. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other major shareholders.

Ownership of a public company

It appears to us that public companies own 9.7% of Terran Orbital. It may be a strategic interest and both companies may have related business interests. They may have separated. This exploitation probably deserves further investigation.

Next steps:

While it is worth considering the different groups that own a business, there are other, even more important factors. To do this, you need to find out about the 3 warning signs we have spotted some with Terran Orbital (including 2 that make us uncomfortable).

Ultimately the future is the most important. You can access this free analyst forecast report for the company.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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