AstroNova, Inc.'s (NASDAQ:ALOT) top owners are individual investors with 42% stake, while 40% is held by institutions
Key Insights
Significant control over AstroNova by individual investors implies that the general public has more power to influence management and governance-related decisions
A total of 15 investors have a majority stake in the company with 51% ownership
Every investor in AstroNova, Inc. (NASDAQ:ALOT) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 42% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Meanwhile, institutions make up 40% of the company’s shareholders. 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 AstroNova.
View our latest analysis for AstroNova
What Does The Institutional Ownership Tell Us About AstroNova?
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.
AstroNova 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. 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 AstroNova's historic earnings and revenue below, but keep in mind there's always more to the story.
It looks like hedge funds own 5.9% of AstroNova shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. The company's largest shareholder is Dimensional Fund Advisors LP, with ownership of 7.5%. Meanwhile, the second and third largest shareholders, hold 7.1% and 6.7%, of the shares outstanding, respectively. Furthermore, CEO Gregory Woods is the owner of 2.0% of the company's shares.
A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 AstroNova
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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 AstroNova, Inc.. Insiders own US$13m worth of shares in the US$103m company. 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, who are usually individual investors, hold a 42% stake in AstroNova. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand AstroNova better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with AstroNova (at least 2 which shouldn't be ignored) , and understanding them should be part of your investment process.
Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.
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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