With 58% Ownership, Tristar Acquisition I Corp. (NYSE:TRIS) Boasts of Strong Institutional Backing

Simply Wall St · Jul 26, 2023 18:41

Key Insights

Given the large stake in the stock by institutions, Tristar Acquisition I's stock price might be vulnerable to their trading decisions
The top 8 shareholders own 51% of the company
Insider ownership in Tristar Acquisition I is 13%

A look at the shareholders of Tristar Acquisition I Corp. (NYSE:TRIS) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 58% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

Let's delve deeper into each type of owner of Tristar Acquisition I, beginning with the chart below.

View our latest analysis for Tristar Acquisition I

ownership-breakdown — NYSE:TRIS Ownership Breakdown July 26th 2023

What Does The Institutional Ownership Tell Us About Tristar Acquisition I?

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 Tristar Acquisition I does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Tristar Acquisition I's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — NYSE:TRIS Earnings and Revenue Growth July 26th 2023

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. It would appear that 14% of Tristar Acquisition I shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. With a 13% stake, CEO William Mounger is the largest shareholder. The second and third largest shareholders are Magnetar Capital Partners, LP and First Trust Capital Management L.P., with an equal amount of shares to their name at 6.9%.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Tristar Acquisition I

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Tristar Acquisition I Corp.. Insiders have a US$23m stake in this US$172m 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 14% 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Tristar Acquisition I is showing 3 warning signs in our investment analysis , and 2 of those are a bit unpleasant...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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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