Navitas Semiconductor Corporation's (NASDAQ:NVTS) institutional investors lost 6.1% over the past week but have profited from longer-term gains
Key Insights
Significantly high institutional ownership implies Navitas Semiconductor's stock price is sensitive to their trading actions
51% of the business is held by the top 12 shareholders
To get a sense of who is truly in control of Navitas Semiconductor Corporation (NASDAQ:NVTS), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 43% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Institutional investors was the group most impacted after the company's market cap fell to US$1.1b last week. However, the 23% one-year returns may have helped alleviate their overall losses. They should, however, be mindful of further losses in the future.
Let's take a closer look to see what the different types of shareholders can tell us about Navitas Semiconductor.
Check out our latest analysis for Navitas Semiconductor
What Does The Institutional Ownership Tell Us About Navitas Semiconductor?
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.
Navitas Semiconductor already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Navitas Semiconductor, (below). Of course, keep in mind that there are other factors to consider, too.
Navitas Semiconductor is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Navitas Semiconductor's case, its Senior Key Executive, Ranbir Singh, is the largest shareholder, holding 14% of shares outstanding. With 5.3% and 5.0% of the shares outstanding respectively, Capricorn Investment Group LLC and Atlantic Bridge Services Limited are the second and third largest shareholders. Additionally, the company's CEO Eugene Sheridan directly holds 2.7% of the total shares outstanding.
Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Navitas Semiconductor
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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 a reasonable proportion of Navitas Semiconductor Corporation. Insiders own US$224m worth of shares in the US$1.1b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. 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.
Private Equity Ownership
With an ownership of 5.3%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Navitas Semiconductor better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Navitas Semiconductor you should be aware of.
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.
