Could The USA Truck, Inc. (NASDAQ:USAK) Ownership Structure Tell Us Something Useful?

If you want to know who really controls USA Truck, Inc. (NASDAQ:USAK), then you’ll have to look at the makeup of its share registry. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Warren Buffett said that he likes “a business with enduring competitive advantages that is run by able and owner-oriented people.” So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.

USA Truck is a smaller company with a market capitalization of US£122m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholders can tell us about USA Truck.

ownership-breakdownNasdaqGS:USAK Ownership Breakdown September 2nd 2021

What Does The Institutional Ownership Tell Us About USA Truck?

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 USA Truck 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at USA Truck’s earnings history below.

Of course, the future is what really matters.

earnings-and-revenue-growthNasdaqGS:USAK Earnings and Revenue Growth September 2nd 2021

It looks like hedge funds own 6.0% of USA Truck shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term.

The Estate Of James B. Speed is currently the company’s largest shareholder with 9.6% of shares outstanding. With 8.1% and 6.0% of the shares outstanding respectively, Dimensional Fund Advisors L.P. and Flint Ridge Capital LLC are the second and third largest shareholders.

Furthermore, CEO James Reed is the owner of 3.4% of the company’s shares. A closer look at our ownership figures suggests that the top 12 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 USA Truck

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. 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 USA Truck, Inc.. Insiders have a US£15m stake in this US£122m business.

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

With a 22% ownership, the general public have some degree of sway over USA Truck. 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.

Private Company Ownership

We can see that Private Companies own 9.6%, of the shares on issue.

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:

It’s always worth thinking about the different groups who own shares in a company.

But to understand USA Truck better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We’ve identified 1 warning sign with USA Truck , and understanding them should be part of your investment process. If you are like me, you may want to think about whether this company will grow or shrink.

Luckily, you can check this free report showing analyst forecasts for its 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.

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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