LibGuides: Companies’ Insider Ownership: Getting Started (2024)

FAQs

How to see how much of a company is owned by insiders? ›

You can retrieve reporting forms from the SEC's EDGAR database or the SEC Info Insider Trading Reports. The most relevant forms that help investors review insiders include Form DEF 14A, Form 13D and 13G, as well as Forms 3, 4, and 5.

Insider ownership refers to the proportion of a company's shares held by individuals or entities considered insiders, such as executives, directors, or significant shareholders.

The SEC's Edgar database allows free public access to all filings related to insider buying and selling of stock shares.

Metrics to Focus On

However, if there is too much insider ownership that's tilted to a few insiders, this can actually cause more volatility as any sentiment shift can immediately tank shares.

An insider is a director, senior officer, entity, or individual that owns more than 10% of a publicly-traded company's voting shares. In the United States, the Securities and Exchange Commission (SEC) has enacted stringent rules to prevent insiders from engaging in insider trading.

The Company's officers, directors, certain employees, certain consultants and certain stockholders (and their family members) are considered “Insiders.” Insiders are subject to insider trading laws that affect the sale and purchase of the Company's stock.

Directors, officers, and key employees have access to material non-public information by virtue of their positions and are considered insiders. Significant stockholders may be presumed to have this access and are likely to be considered insiders.

Insider trading is illegal, but not always. Corporate insiders can legally buy and sell stock in their own companies, but only if they promptly report their trades to the U.S. Securities and Exchange Commission (SEC). They make the material information public by reporting it to the proper agency.

What companies are insiders buying? ›

If you bought the security through a brokerage firm, contact the firm and ask if they have a record of your ownership. Brokerage firms are required to keep records for only six years. Copies of confirmations are only required to be kept for three years.

The IBD Accumulation/Distribution Rating is a quick way to see if institutions are buying or selling a stock. This is found on MarketSmith's weekly chart or in IBD's Stock Checkup tool. Stocks are rated from A+ to E, with A+ being the best and E being the worst.

Some companies have blackout periods when officers, directors, and other designated people are barred from purchasing the company's securities. During the closed period (usually around earnings announcements) insiders must stop trading company shares.

The main argument against insider trading is that it is unfair and discourages ordinary people from participating in markets, making it more difficult for companies to raise capital. Insider trading based on material nonpublic information is illegal.

Search for company. Select Ownership link-->Insider Trades. In CapitalIQ, search for Company. In the left column, under Investors, select Public Ownership to view details and insider trades.

Any shareholder has percentage ownership in the company, determined by dividing the number of shares they own by outstanding shares (company's capital stock), multiplied by 100. Even if the number of shares a person has is fixed, their percentage ownership can change over time if the outstanding shares change.

All of this information is disclosed on the Companies House register, which anyone can access free of charge online. However, there is no requirement for any person who becomes a shareholder of a private company after its incorporation to provide their service address to Companies House.

You will likely only be able to find out the names of certain shareholders of a company if the company is publicly traded. If a company is privately held, you may not be able to find out the names of the shareholders without contacting the company and asking.