Legacy Housing Corporation (NASDAQ:LEGH) insiders seem bullish, own 60% and have been buying more recently

To get a sense of who is truly in control of Legacy Housing Corporation (NASDAQ:LEGH), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 60% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And looking at our data, we can see that insiders have bought shares recently. This could be interpreted as insiders anticipating a rise in stock prices in the near future.

In the chart below, we zoom in on the different ownership groups of Legacy Housing.

View our latest analysis for Legacy Housing

What Does The Institutional Ownership Tell Us About Legacy Housing?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Legacy Housing does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Legacy Housing, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Legacy Housing. From our data, we infer that the largest shareholder is Kenneth Shipley (who also holds the title of Top Key Executive) with 38% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. Curtis Hodgson is the second largest shareholder owning 22% of common stock, and The Vanguard Group, Inc. holds about 1.9% of the company stock. Interestingly, the second-largest shareholder, Curtis Hodgson is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 60% stake.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Legacy Housing

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders own more than half of Legacy Housing Corporation. This gives them effective control of the company. Given it has a market cap of US$496m, that means they have US$297m worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. 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 17% stake in Legacy Housing. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Legacy Housing better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Legacy Housing .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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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