Yahoo Finance Sterling Infrastructure, Inc.'s (NASDAQ:STRL) institutional investors lost 3.5% over the past week but have profited from longer-term gains
Key Insights
Significantly high institutional ownership implies Sterling Infrastructure's stock price is sensitive to their trading actions
51% of the business is held by the top 14 shareholders
Every investor in Sterling Infrastructure, Inc. (NASDAQ:STRL) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 86% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
No shareholder likes losing money on their investments, especially institutional investors who saw their holdings drop 3.5% in value last week. Still, the 170% one-year gains may have helped mitigate their overall losses. They should, however, be mindful of further losses in the future.
In the chart below, we zoom in on the different ownership groups of Sterling Infrastructure.
Check out our latest analysis for Sterling Infrastructure
What Does The Institutional Ownership Tell Us About Sterling Infrastructure?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
We can see that Sterling Infrastructure does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Sterling Infrastructure'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. Sterling Infrastructure is not owned by hedge funds. The company's largest shareholder is FMR LLC, with ownership of 11%. For context, the second largest shareholder holds about 8.9% of the shares outstanding, followed by an ownership of 6.1% by the third-largest shareholder. Additionally, the company's CEO Joseph Cutillo directly holds 1.2% of the total shares outstanding.
After doing some more digging, we found that the top 14 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Sterling Infrastructure
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.
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.
Our most recent data indicates that insiders own some shares in Sterling Infrastructure, Inc.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$111m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 11% stake in Sterling Infrastructure. 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.
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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Sterling Infrastructure , 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.
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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.
