A look at the shareholders of WW Grainger, Inc. (NYSE: GWW) can tell us which group is more powerful. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. I like to see at least a little insider ownership. As Charlie Munger said “Show me the incentive and I’ll show you the result”.
With a market cap of US$26 billion, WW Grainger is pretty big. We expect to see institutional investors on the register. Companies of this size are also generally well known to retail investors. Our analysis of company ownership, below, shows that the institutions are visible on the share register. Let’s dig deeper into each type of owner to learn more about WW Grainger.
What does institutional ownership tell us about WW Grainger?
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.
We can see that WW Grainger 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. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out WW Grainger’s past revenue trajectory, (below). Of course, keep in mind that there are other factors to consider as well.
Since institutional investors own more than half of the issued shares, the board will likely have to pay attention to their preferences. Hedge funds don’t have a lot of shares in WW Grainger. Looking at our data, we can see that the largest shareholder is Susan Williams with 10% of the shares outstanding. For context, the second shareholder owns approximately 10% of the outstanding shares, followed by a 7.3% ownership by the third shareholder.
Looking at the shareholder register, we can see that 50% of the ownership is controlled by the top 15 shareholders, which means that no shareholder has a controlling interest in the ownership.
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.
Insider property of WW Grainger
The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. 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.
Our most recent data indicates that insiders own a reasonable proportion of WW Grainger, Inc. It is very interesting to see that insiders hold a significant $2.8 billion stake in this $26 billion company. Most would be delighted to see the board investing alongside them. You may want to access this free chart showing recent insider trades.
General public property
With an 18% stake, the general public, consisting primarily of individual investors, has some influence over WW Grainger. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.
I find it very interesting to see who exactly owns a company. But to really get insight, we also need to consider other information. For example, we have identified 1 warning sign for WW Grainger of which you should be aware.
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 in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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