Key Insights

• The considerable ownership by private companies in EchoStar indicates that they collectively have a greater say in management and business strategy

• The top 2 shareholders own 54% of the company

• Insiders have bought recently

If you want to know who really controls EchoStar Corporation (NASDAQ:SATS), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 37% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

While private companies were the group that reaped the most benefits after last week’s 8.5% price gain, institutions also received a 28% cut.

Let's take a closer look to see what the different types of shareholders can tell us about EchoStar.

Check out our latest analysis for EchoStar

What Does The Institutional Ownership Tell Us About EchoStar?

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.

We can see that EchoStar does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 EchoStar, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in EchoStar. Looking at our data, we can see that the largest shareholder is Ergen Family Trust with 37% of shares outstanding. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 5.3% by the third-largest shareholder. Charles Ergen, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 EchoStar

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

It seems insiders own a significant proportion of EchoStar Corporation. It has a market capitalization of just US$4.7b, and insiders have US$858m worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over EchoStar. 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 37%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. Case in point: We've spotted 2 warning signs for EchoStar 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.