Institutions own 31% of NN, Inc. (NASDAQ:NNBR) shares but retail investors control 35% of the company
Key Insights
NN's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
The top 12 shareholders own 50% of the company
To get a sense of who is truly in control of NN, Inc. (NASDAQ:NNBR), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 35% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Institutions, on the other hand, account for 31% of the company's stockholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.
In the chart below, we zoom in on the different ownership groups of NN.
See our latest analysis for NN
What Does The Institutional Ownership Tell Us About NN?
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.
NN already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 NN's historic earnings and revenue below, but keep in mind there's always more to the story.
It would appear that 23% of NN 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. Looking at our data, we can see that the largest shareholder is Corre Partners Management, LLC with 14% of shares outstanding. With 9.2% and 4.8% of the shares outstanding respectively, Legion Partners Asset Management, LLC and The Vanguard Group, Inc. are the second and third largest shareholders. Furthermore, CEO Harold Bevis is the owner of 3.2% of the company's shares.
A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of NN
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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.
Our most recent data indicates that insiders own a reasonable proportion of NN, Inc.. Insiders have a US$11m stake in this US$107m business. 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 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over NN. 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for NN that you should be aware of.
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.
