Yahoo Finance Institutional investors in Garmin Ltd. (NYSE:GRMN) see US$703m decrease in market cap last week, although long-term gains have benefitted them.
Key Insights
Given the large stake in the stock by institutions, Garmin's stock price might be vulnerable to their trading decisions
The top 11 shareholders own 50% of the company
If you want to know who really controls Garmin Ltd. (NYSE:GRMN), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 55% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
No shareholder likes losing money on their investments, especially institutional investors who saw their holdings drop 3.4% in value last week. However, the 33% one-year returns may have helped alleviate their overall losses. They should, however, be mindful of further losses in the future.
Let's delve deeper into each type of owner of Garmin, beginning with the chart below.
Check out our latest analysis for Garmin
What Does The Institutional Ownership Tell Us About Garmin?
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.
Garmin 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. 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 Garmin's earnings history below. Of course, the future is what really matters.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Garmin. Jonathan Burrell is currently the largest shareholder, with 9.9% of shares outstanding. Min-Hwan Kao is the second largest shareholder owning 9.6% of common stock, and The Vanguard Group, Inc. holds about 9.4% of the company stock. Min-Hwan Kao, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.
A closer look at our ownership figures suggests that the top 11 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 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 Garmin
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.
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 Garmin Ltd.. It has a market capitalization of just US$20b, and insiders have US$4.0b 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
The general public, who are usually individual investors, hold a 25% stake in Garmin. 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.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Garmin better, we need to consider many other factors.
I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.
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.
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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.
