Key Insights

• The considerable ownership by individual investors in FreightCar America indicates that they collectively have a greater say in management and business strategy
• A total of 20 investors have a majority stake in the company with 50% ownership
• Recent sales by insiders

If you want to know who really controls FreightCar America, Inc. (NASDAQ:RAIL), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 27% increase in the stock price last week, individual investors profited the most, but institutions who own 29% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of FreightCar America.

What Does The Institutional Ownership Tell Us About FreightCar America?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in FreightCar America. 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 FreightCar America, (below). Of course, keep in mind that there are other factors to consider, too.

FreightCar America is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Fabricaciones y Servicios de México, S.A. de C.V. with 10% of shares outstanding. With 8.4% and 8.2% of the shares outstanding respectively, Continental General Insurance Company, Asset Management Arm and Pacific Investment Management Company LLC are the second and third largest shareholders. In addition, we found that Nicholas Randall, the CEO has 0.8% of the shares allocated to their name.

A closer look at our ownership figures suggests that the top 20 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of FreightCar America

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in FreightCar America, Inc.. It has a market capitalization of just US$287m, and insiders have US$40m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 45% stake in FreightCar America. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 12%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for FreightCar America that you should be aware of.

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.

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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.