With 80% ownership, Transcat, Inc. (NASDAQ:TRNS) boasts of strong institutional backing
Key Insights
Given the large stake in the stock by institutions, Transcat's stock price might be vulnerable to their trading decisions
A total of 7 investors have a majority stake in the company with 52% ownership
A look at the shareholders of Transcat, Inc. (NASDAQ:TRNS) can tell us which group is most powerful. The group holding the most number of shares in the company, around 80% 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).
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
Let's delve deeper into each type of owner of Transcat, beginning with the chart below.
Check out our latest analysis for Transcat
What Does The Institutional Ownership Tell Us About Transcat?
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 Transcat does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Transcat'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. Our data indicates that hedge funds own 5.9% of Transcat. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Our data shows that Neuberger Berman Investment Advisers LLC is the largest shareholder with 11% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 9.5%, of the shares outstanding, respectively. In addition, we found that Lee Rudow, the CEO has 1.8% of the shares allocated to their name.
On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Transcat
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
Shareholders would probably be interested to learn that insiders own shares in Transcat, Inc.. In their own names, insiders own US$28m worth of stock in the US$729m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Transcat. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Transcat better, we need to consider many other factors. For example, we've discovered 2 warning signs for Transcat that you should be aware of before investing here.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
