Following a 4.4% decline over last year, recent gains may please Shenandoah Telecommunications Company (NASDAQ:SHEN) institutional owners
Key Insights
Institutions' substantial holdings in Shenandoah Telecommunications implies that they have significant influence over the company's share price
A total of 9 investors have a majority stake in the company with 51% ownership
Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
If you want to know who really controls Shenandoah Telecommunications Company (NASDAQ:SHEN), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 64% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).
After a year of 4.4% losses, last week’s 7.9% gain would be welcomed by institutional investors as a likely sign that returns might start trending higher.
Let's delve deeper into each type of owner of Shenandoah Telecommunications, beginning with the chart below.
See our latest analysis for Shenandoah Telecommunications
What Does The Institutional Ownership Tell Us About Shenandoah Telecommunications?
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.
Shenandoah Telecommunications already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Shenandoah Telecommunications' 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. Shenandoah Telecommunications is not owned by hedge funds. Our data shows that BlackRock, Inc. is the largest shareholder with 16% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 11% of common stock, and Energy Capital Partners, LLC holds about 4.9% of the company stock. Furthermore, CEO Christopher French is the owner of 3.7% of the company's shares.
We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Shenandoah Telecommunications
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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.
Our most recent data indicates that insiders own some shares in Shenandoah Telecommunications Company. This is a big company, so it is good to see this level of alignment. Insiders own US$44m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 32% stake in Shenandoah Telecommunications. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Shenandoah Telecommunications , and understanding them should be part of your investment process.
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.
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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.
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