After losing 23% last year, institutional owners of Shenandoah Telecommunications Company (NASDAQ:SHEN) must be relieved by recent gain
Every investor in Shenandoah Telecommunications Company (NASDAQ:SHEN) should know the most powerful shareholder groups. We can see that institutions hold the lion’s share of the business with 55% ownership. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.
Institutional investors would appreciate last week’s 10% rise in stock prices, given that their one-year returns were a disappointing 23%.
Let’s dive deeper into each type of Shenandoah Telecommunications owner, starting with the table below.
Check out our latest analysis for Shenandoah Telecommunications
What does institutional ownership tell us about Shenandoah Telecommunications?
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.
We can see that Shenandoah Telecommunications has institutional investors; and they own a good part of the shares of the company. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. It is therefore worth checking the past earnings trajectory of Shenandoah Telecommunications (below). Of course, keep in mind that there are other factors to consider as well.
Institutional investors own more than 50% of the company, so together they can probably heavily influence board decisions. Shenandoah Telecommunications is not owned by hedge funds. The company’s largest shareholder is BlackRock, Inc., with a 16% stake. Meanwhile, the second and third largest shareholders hold 10% and 3.7% of the outstanding shares respectively. Christopher French, who is the third shareholder, also holds the title of Chairman of the Board.
A closer look at our ownership figures suggests that the top 20 shareholders hold a combined ownership of 50%, implying that no single shareholder has a majority.
While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Insider ownership of Shenandoah Telecommunications
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders hold shares of Shenandoah Telecommunications Company. Insiders have a significant stake worth US$49 million. Most would see this as a real positive. Most would say this shows the alignment of interests between shareholders and the board. Still, it might be worth checking to see if these insiders have sold.
General public property
With a 41% stake, the general public, consisting primarily of individual investors, has some influence over Shenandoah Telecommunications. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.
While it is worth considering the different groups that own a business, there are other, even more important factors. For example, we found 2 warning signs for Shenandoah Telecommunications which you should be aware of before investing here.
If you prefer to find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.