Advertisement
New Zealand markets open in 3 hours 56 minutes
  • NZX 50

    11,682.39
    -89.41 (-0.76%)
     
  • NZD/USD

    0.6121
    -0.0001 (-0.02%)
     
  • ALL ORDS

    8,039.90
    +27.80 (+0.35%)
     
  • OIL

    80.59
    -0.70 (-0.86%)
     
  • GOLD

    2,334.70
    -34.30 (-1.45%)
     

Bristol-Myers Squibb Company (NYSE:BMY) is a favorite amongst institutional investors who own 79%

Key Insights

  • Given the large stake in the stock by institutions, Bristol-Myers Squibb's stock price might be vulnerable to their trading decisions

  • 49% of the business is held by the top 25 shareholders

  • Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Bristol-Myers Squibb Company (NYSE:BMY) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 79% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

ADVERTISEMENT

Let's delve deeper into each type of owner of Bristol-Myers Squibb, beginning with the chart below.

View our latest analysis for Bristol-Myers Squibb

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Bristol-Myers Squibb?

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 Bristol-Myers Squibb does have institutional investors; and they hold a good portion of the company's stock. 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 Bristol-Myers Squibb's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
earnings-and-revenue-growth

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Bristol-Myers Squibb. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 9.2%. Meanwhile, the second and third largest shareholders, hold 8.0% and 4.5%, of the shares outstanding, respectively.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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 Bristol-Myers Squibb

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.

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 information suggests that Bristol-Myers Squibb Company insiders own under 1% of the company. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own US$65m of stock. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 21% 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.

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 instance, we've identified 2 warning signs for Bristol-Myers Squibb that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.