Yahoo Finance Insiders still control 49% of Samsara Inc. (NYSE:IOT) despite recent sales
Key Insights
Insiders appear to have a vested interest in Samsara's growth, as seen by their sizeable ownership
58% of the business is held by the top 3 shareholders
Every investor in Samsara Inc. (NYSE:IOT) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 49% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Even though insiders have sold shares recently, the group owns the most numbers of shares in the company and as a result benefitted the most after market cap rose US$724m last week.
In the chart below, we zoom in on the different ownership groups of Samsara.
See our latest analysis for Samsara
What Does The Institutional Ownership Tell Us About Samsara?
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.
We can see that Samsara does have institutional investors; and they hold a good portion of the company's stock. 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 Samsara's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Samsara. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Samsara's case, its Top Key Executive, John Bicket, is the largest shareholder, holding 21% of shares outstanding. Sanjit Biswas is the second largest shareholder owning 21% of common stock, and Andreessen Horowitz LLC holds about 16% of the company stock. Interestingly, the second-largest shareholder, Sanjit Biswas is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.
After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Samsara
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
It seems insiders own a significant proportion of Samsara Inc.. It has a market capitalization of just US$10b, and insiders have US$5.0b worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
The general public-- including retail investors -- own 12% 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 Equity Ownership
Private equity firms hold a 22% stake in Samsara. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Samsara better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Samsara 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.
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.
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