If you want to know what exactly Apple Inc. (NASDAQ:AAPL), you need to look at the makeup of its stock registry. We can see that institutions hold the lion’s share in the company with 54% ownership. In other words, the group has the most to gain (or the most to lose) from its investment in the company.
Because they have access to large amounts of institutional capital, their markets are heavily scrutinized by retail or individual investors. Therefore, having a significant amount of institutional money invested in a company is often regarded as a desirable characteristic.
Let’s take a look at what the different types of shareholders can tell us about Apple.
See our latest analysis for Apple
loss of ownership
What does institutional ownership tell us about Apple?
Institutions usually measure themselves against a benchmark when reporting to their own investors, so they often become more bullish about a stock once it’s included in a major index. We would expect that most companies would keep some institution on the register, especially if they are growing.
Apple already has institutions on the share registry. In fact, they hold a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But like anyone else, they can be wrong. If several institutions change their mind on a stock at the same time, you could see a rapid decline in the share price. That’s why it’s worth looking at Apple’s earnings history below. Of course, the future is what really matters.
earnings-and-revenue-growth
Investors should note that the institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don’t own much stock in Apple. Vanguard Group, Inc. Currently the largest shareholder of the company with 8.1% of the outstanding shares. For context, the second largest shareholder owns approximately 6.4% of the outstanding shares, followed by the third largest shareholder with 5.7%.
Our studies show that the top 25 shareholders collectively control less than half of the company’s shares, meaning that the company’s shares are widely circulated and there is no dominant shareholder.
While studying institutional ownership of a company can add value to your research, it’s also a good practice to research analyst recommendations to get a deeper understanding of the stock’s expected performance. There are plenty of analysts covering the stock, so it might be worth taking a look to see what they’re forecasting.
insider ownership of apple
While the exact definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management runs the business, but the CEO will answer to the board, even though he is a member of it.
Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our data shows that insiders own Apple Inc. K owns less than 1%. As this is a large company, we would only expect insiders to own a small percentage of it. But it is worth noting that he holds US$1.5b worth of shares. It’s good to see that board members own shares, but it might be worth checking whether they’re insiders buying.
general public ownership
With 40% ownership, the general public, consisting mostly of individual investors, has some degree of sway over Apple. While this group may not necessarily call the shots, it can certainly have a real impact on the way a company is run.
public company ownership
It appears that public companies own 5.7% of Apple. It may be a strategic interest and the business interests of both the companies may be related. It could be that they got de-merged. This holding is probably worth further investigation.
Next steps:
I find it very interesting to see who really owns the company. But to really gain insight, we need to consider other information as well. For example consider the risks. every company has, and we’ve seen 2 warning signs for Apple You should know about this.
If you want to know what analysts are predicting in terms of future growth, don’t miss this Free Reports on analyst forecasts.
NB: figures in this article are calculated using data from the last twelve months, which refers to the 12-month period ending on the last day of the month in which the financial statements are dated. This may not tally with the figures in the Annual Report for the entire year.
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This article from Simply Wall St is general in nature. We only provide commentary based on historical data and analyst forecasts using an unbiased methodology and our articles are not intended to provide financial advice. It is not a recommendation to buy or sell any stock, and does not take into account 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 Street has no position in any of the stocks mentioned.
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Source: finance.yahoo.com
