Institutional Investors Control 89% of Seagate Technology Holdings Plc (NASDAQ:STX) and Were Rewarded Last Week After Stock Increased 5.3%

Simply Wall St · Nov 15, 2023 23:29

Key Insights

Significantly high institutional ownership implies Seagate Technology Holdings' stock price is sensitive to their trading actions
A total of 8 investors have a majority stake in the company with 52% ownership
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Seagate Technology Holdings plc (NASDAQ:STX), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 89% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And as as result, institutional investors reaped the most rewards after the company's stock price gained 5.3% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 40%.

Let's take a closer look to see what the different types of shareholders can tell us about Seagate Technology Holdings.

View our latest analysis for Seagate Technology Holdings

ownership-breakdown — NasdaqGS:STX Ownership Breakdown November 15th 2023

What Does The Institutional Ownership Tell Us About Seagate Technology Holdings?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Seagate Technology Holdings. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Seagate Technology Holdings' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — NasdaqGS:STX Earnings and Revenue Growth November 15th 2023

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Seagate Technology Holdings. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 11% of shares outstanding. The second and third largest shareholders are Sanders Capital, LLC and BlackRock, Inc., with an equal amount of shares to their name at 7.2%.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Seagate Technology Holdings

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.

Our data suggests that insiders own under 1% of Seagate Technology Holdings plc in their own names. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own US$74m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Seagate Technology Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Be aware that Seagate Technology Holdings is showing 3 warning signs in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.