Yahoo Finance Institutional owners may ignore Procore Technologies, Inc.'s (NYSE:PCOR) recent US$756m market cap decline as longer-term profits stay in the green
Key Insights
Given the large stake in the stock by institutions, Procore Technologies' stock price might be vulnerable to their trading decisions
A total of 5 investors have a majority stake in the company with 50% ownership
If you want to know who really controls Procore Technologies, Inc. (NYSE:PCOR), 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 76% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Institutional investors endured the highest losses after the company's market cap fell by US$756m last week. However, the 19% one-year return to shareholders may have helped lessen their pain. They should, however, be mindful of further losses in the future.
In the chart below, we zoom in on the different ownership groups of Procore Technologies.
See our latest analysis for Procore Technologies
What Does The Institutional Ownership Tell Us About Procore Technologies?
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 Procore Technologies. 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 Procore Technologies' 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. Hedge funds don't have many shares in Procore Technologies. Our data shows that ICONIQ Capital, LLC is the largest shareholder with 30% of shares outstanding. With 6.5% and 5.9% of the shares outstanding respectively, T. Rowe Price Group, Inc. and Deer Management Company, LLC are the second and third largest shareholders. In addition, we found that Craig Courtemanche, the CEO has 3.1% of the shares allocated to their name.
Our research also brought to light the fact that roughly 50% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Procore Technologies
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
We can see that insiders own shares in Procore Technologies, Inc.. It is a very large company, and board members collectively own US$600m worth of shares (at current prices). Most would say this shows a good alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 11% stake in Procore Technologies. 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 Equity Ownership
Private equity firms hold a 5.9% stake in Procore Technologies. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Procore Technologies (of which 1 doesn't sit too well with us!) you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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