Key Insights

• Institutions' substantial holdings in PennyMac Mortgage Investment Trust implies that they have significant influence over the company's share price
• 50% of the business is held by the top 11 shareholders
• Insiders have been buying lately

To get a sense of who is truly in control of PennyMac Mortgage Investment Trust (NYSE:PMT), it is important to understand the ownership structure of the business. With 67% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And as as result, institutional investors reaped the most rewards after the company's stock price gained 6.3% last week. The one-year return on investment is currently 20% and last week's gain would have been more than welcomed.

Let's delve deeper into each type of owner of PennyMac Mortgage Investment Trust, beginning with the chart below.

What Does The Institutional Ownership Tell Us About PennyMac Mortgage Investment Trust?

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.

PennyMac Mortgage Investment Trust already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 PennyMac Mortgage Investment Trust, (below). Of course, keep in mind that there are other factors to consider, too.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. PennyMac Mortgage Investment Trust is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 17% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 7.1%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 11 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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 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 PennyMac Mortgage Investment Trust

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in PennyMac Mortgage Investment Trust. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$13m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 32% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand PennyMac Mortgage Investment Trust better, we need to consider many other factors. Be aware that PennyMac Mortgage Investment Trust is showing 2 warning signs in our investment analysis , you should know about...

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

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com