American Outdoor Brands, Inc. (NASDAQ:AOUT) institutional owners may be pleased with recent gains after 44% loss over the past year
Key Insights
- Institutions' substantial holdings in American Outdoor Brands implies that they have significant influence over the company's share price
- The top 7 shareholders own 54% of the company
- Using data from company's past performance alongside ownership research, one can better assess the future performance of a company
To get a sense of who is truly in control of American Outdoor Brands, Inc. (NASDAQ:AOUT), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 74% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Institutional investors would appreciate the 12% increase in share price last week, given their one-year losses have totalled a disappointing 44%.
Let's take a closer look to see what the different types of shareholders can tell us about American Outdoor Brands.
View our latest analysis for American Outdoor Brands
What Does The Institutional Ownership Tell Us About American Outdoor Brands?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that American Outdoor Brands 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of American Outdoor Brands, (below). Of course, keep in mind that there are other factors to consider, too.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Our data indicates that hedge funds own 5.2% of American Outdoor Brands. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that Brandes Investment Partners, LP is the largest shareholder with 14% of shares outstanding. For context, the second largest shareholder holds about 8.9% of the shares outstanding, followed by an ownership of 6.8% by the third-largest shareholder. Furthermore, CEO Brian Murphy is the owner of 1.6% of the company's shares.
We did some more digging and found that 7 of the top shareholders account for roughly 54% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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 is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of American Outdoor Brands
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Shareholders would probably be interested to learn that insiders own shares in American Outdoor Brands, Inc.. As individuals, the insiders collectively own US$6.5m worth of the US$104m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 15% stake in American Outdoor Brands. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
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. Case in point: We've spotted 2 warning signs for American Outdoor Brands you should be aware of, and 1 of them is a bit unpleasant.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.