U.S. markets open in 6 hours 47 minutes
  • S&P Futures

    3,946.25
    +1.25 (+0.03%)
     
  • Dow Futures

    33,640.00
    +7.00 (+0.02%)
     
  • Nasdaq Futures

    11,569.50
    +3.50 (+0.03%)
     
  • Russell 2000 Futures

    1,813.80
    -0.30 (-0.02%)
     
  • Crude Oil

    74.39
    +0.14 (+0.19%)
     
  • Gold

    1,786.80
    +4.40 (+0.25%)
     
  • Silver

    22.52
    +0.19 (+0.83%)
     
  • EUR/USD

    1.0467
    -0.0002 (-0.02%)
     
  • 10-Yr Bond

    3.5130
    0.0000 (0.00%)
     
  • Vix

    22.17
    +1.42 (+6.84%)
     
  • GBP/USD

    1.2142
    +0.0009 (+0.07%)
     
  • USD/JPY

    137.4910
    +0.5310 (+0.39%)
     
  • BTC-USD

    16,790.84
    -219.81 (-1.29%)
     
  • CMC Crypto 200

    394.29
    -7.51 (-1.87%)
     
  • FTSE 100

    7,521.39
    -46.15 (-0.61%)
     
  • Nikkei 225

    27,686.40
    -199.47 (-0.72%)
     

Owning 47% shares,institutional owners seem interested in Oil-Dri Corporation of America (NYSE:ODC),

Every investor in Oil-Dri Corporation of America (NYSE:ODC) should be aware of the most powerful shareholder groups. With 47% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

Let's take a closer look to see what the different types of shareholders can tell us about Oil-Dri Corporation of America.

See our latest analysis for Oil-Dri Corporation of America

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Oil-Dri Corporation of America?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Oil-Dri Corporation of America. 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 Oil-Dri Corporation of America'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

We note that hedge funds don't have a meaningful investment in Oil-Dri Corporation of America. Looking at our data, we can see that the largest shareholder is Jaffee Investment Partnership L.P. with 17% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.0% and 7.0%, of the shares outstanding, respectively. Daniel Jaffee, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We did some more digging and found that 8 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Oil-Dri Corporation of America

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

It seems insiders own a significant proportion of Oil-Dri Corporation of America. Insiders have a US$22m stake in this US$195m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. 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.

Private Company Ownership

It seems that Private Companies own 17%, of the Oil-Dri Corporation of America stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Oil-Dri Corporation of America has 3 warning signs (and 1 which is a bit concerning) we think you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

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

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here