After losing 35% in the past year, Perimeter Solutions, SA (NYSE:PRM) institutional owners must be relieved by the recent gain
Key Insights
Institutions' substantial holdings in Perimeter Solutions implies that they have significant influence over the company's share price
50% of the business is held by the top 10 shareholders
Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
A look at the shareholders of Perimeter Solutions, SA (NYSE:PRM) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 61% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Institutional investors would appreciate the 12% increase in share price last week, given their one-year losses have totalled a disappointing 35%.
In the chart below, we zoom in on the different ownership groups of Perimeter Solutions.
View our latest analysis for Perimeter Solutions
What Does The Institutional Ownership Tell Us About Perimeter Solutions?
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.
Perimeter Solutions 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. 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 Perimeter Solutions' 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. It looks like hedge funds own 19% of Perimeter Solutions shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Looking at our data, we can see that the largest shareholder is The WindAcre Partnership LLC with 14% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 7.6% of common stock, and JP Morgan Asset Management holds about 5.3% of the company stock. Additionally, the company's CEO Haitham Khouri directly holds 1.0% of the total shares outstanding.
We also observed that the top 10 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 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 Perimeter Solutions
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. 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.
We can see that insiders own shares in Perimeter Solutions, SA. In their own names, insiders own US$44m worth of stock in the US$874m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 14% stake in Perimeter Solutions. 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:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for Perimeter Solutions you should be aware of, and 1 of them is a bit unpleasant.
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.
