U.S. Markets closed
  • S&P 500

    4,356.45
    -53.68 (-1.22%)
     
  • Dow 30

    34,297.73
    -66.77 (-0.19%)
     
  • Nasdaq

    13,539.29
    -229.61 (-1.67%)
     
  • Russell 2000

    2,025.05
    +37.13 (+1.87%)
     
  • Crude Oil

    85.15
    +1.84 (+2.21%)
     
  • Gold

    1,848.70
    +7.00 (+0.38%)
     
  • Silver

    23.89
    +0.09 (+0.36%)
     
  • EUR/USD

    1.1303
    -0.0027 (-0.2374%)
     
  • 10-Yr Bond

    1.7830
    +0.0360 (+2.06%)
     
  • Vix

    29.99
    +1.14 (+3.95%)
     
  • GBP/USD

    1.3508
    +0.0017 (+0.1297%)
     
  • USD/JPY

    113.8900
    -0.0700 (-0.0614%)
     
  • BTC-USD

    36,674.89
    -231.01 (-0.63%)
     
  • CMC Crypto 200

    833.18
    +22.57 (+2.78%)
     
  • FTSE 100

    7,371.46
    -122.67 (-1.64%)
     
  • Nikkei 225

    27,131.34
    -457.06 (-1.66%)
     

Is CarParts.com, Inc. (NASDAQ:PRTS) Popular Amongst Insiders?

  • Oops!
    Something went wrong.
    Please try again later.
·5 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • PRTS

The big shareholder groups in CarParts.com, Inc. (NASDAQ:PRTS) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

CarParts.com is a smaller company with a market capitalization of US$712m, so it may still be flying under the radar of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about CarParts.com.

Check out our latest analysis for CarParts.com

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About CarParts.com?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that CarParts.com 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see CarParts.com's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
earnings-and-revenue-growth

It would appear that 6.0% of CarParts.com shares are controlled by hedge funds. 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 Mina Khazani is the largest shareholder with 6.4% of shares outstanding. The second and third largest shareholders are Sol Khazani and Renaissance Technologies Corp., with an equal amount of shares to their name at 6.1%. Sol Khazani, who is the second-largest shareholder, also happens to hold the title of Top Key Executive. Additionally, the company's CEO Lev Peker directly holds 1.7% of the total shares outstanding.

A closer look at our ownership figures suggests that the top 16 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of CarParts.com

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in CarParts.com, Inc.. It has a market capitalization of just US$712m, and insiders have US$175m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 36% ownership, the general public have some degree of sway over CarParts.com. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand CarParts.com better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for CarParts.com you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.