Following Snap-on Incorporated’s (NYSE:SNA) latest market cap drop of US$364 million, institutional owners may be forced to take tough action
If you want to know who actually controls Snap-on Incorporated (NYSE:SNA), then you’ll need to look at the makeup of its share registry. We can see that institutions hold the lion’s share of the business with 88% ownership. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.
And institutional investors suffered the highest losses after the company’s share price fell 3.1% last week. The recent loss, on top of a 3.5% year-on-year loss to shareholders, may not be suitable for this group of investors. Often referred to as “market makers,” institutions wield significant power in influencing the price dynamics of any stock. Therefore, if Snap-on stock price weakness persists, institutional investors may feel compelled to sell the stock, which may not be ideal for individual investors.
In the table below, we zoom in on the different Snap-on property groups.
See our latest analysis for Snap-on
What does institutional ownership tell us about Snap-on?
Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
We can see that Snap-on has institutional investors; and they own a good part of the shares of the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out Snap-on’s revenue history below. Of course, the future is what really matters.
Investors should note that institutions actually own more than half of the company, so they can collectively wield significant power. Hedge funds don’t have a lot of shares in Snap-on. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 12% of shares outstanding. For context, the second shareholder owns approximately 8.7% of the outstanding shares, followed by a 4.2% ownership by the third shareholder. Additionally, we found that Nicholas Pinchuk, the CEO, owns 1.2% of the shares allocated to his name.
After digging a little deeper, we found that the top 19 held combined ownership of 50% of the company, suggesting that no single shareholder has significant control over the company.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.
Snap-on Insider Ownership
The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
We can see that insiders own shares in Snap-on Incorporated. It’s a very large company, and the board members collectively own $191 million in stock (at today’s prices). sometimes we are interested in whether they bought or sold.
General public property
The general public, who are usually individual investors, own a 10% stake in Snap-on. While that size of ownership might not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.
While it is worth considering the different groups that own a business, there are other, even more important factors. Consider the risks, for example. Every business has them, and we’ve spotted 1 warning sign for Snap-on you should know.
If you prefer to find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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