With 49% ownership in Hyatt Hotels Corporation (NYSE:H), institutional investors have a lot riding on the business
Key Insights
Given the large stake in the stock by institutions, Hyatt Hotels' stock price might be vulnerable to their trading decisions
50% of the business is held by the top 20 shareholders
A look at the shareholders of Hyatt Hotels Corporation (NYSE:H) can tell us which group is most powerful. With 49% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And as as result, institutional investors reaped the most rewards after the company's stock price gained 3.2% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 32%.
Let's take a closer look to see what the different types of shareholders can tell us about Hyatt Hotels.
Check out our latest analysis for Hyatt Hotels
What Does The Institutional Ownership Tell Us About Hyatt Hotels?
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.
Hyatt Hotels 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 Hyatt Hotels' historic earnings and revenue below, but keep in mind there's always more to the story.
Hyatt Hotels is not owned by hedge funds. The company's largest shareholder is Penny Pritzker, with ownership of 6.5%. Baron Capital Group, Inc. is the second largest shareholder owning 5.3% of common stock, and The Vanguard Group, Inc. holds about 4.2% of the company stock. Additionally, the company's CEO Mark Hoplamazian directly holds 0.6% of the total shares outstanding.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 20 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Hyatt Hotels
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.
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.
It seems insiders own a significant proportion of Hyatt Hotels Corporation. It is very interesting to see that insiders have a meaningful US$1.8b stake in this US$15b business. 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 group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
It seems that Private Companies own 7.8%, of the Hyatt Hotels stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
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. For example, we've discovered 4 warning signs for Hyatt Hotels that you should be aware of before investing here.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.
