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Institutional investors may adopt severe steps after Capri Holdings Limited's (NYSE:CPRI) latest 12% drop adds to a year losses

Key Insights

  • Institutions' substantial holdings in Capri Holdings implies that they have significant influence over the company's share price

  • A total of 12 investors have a majority stake in the company with 51% ownership

  • Insiders have been buying lately

A look at the shareholders of Capri Holdings Limited (NYSE:CPRI) can tell us which group is most powerful. With 88% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, institutional investors endured the highest losses last week after market cap fell by US$888m. The recent loss, which adds to a one-year loss of 30% for stockholders, may not sit well with this group of investors. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. As a result, if the decline continues, institutional investors may be pressured to sell Capri Holdings which might hurt individual investors.

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

See our latest analysis for Capri Holdings

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Capri Holdings?

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.

Capri Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Capri Holdings' earnings history below. Of course, the future is what really matters.

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

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Capri Holdings is not owned by hedge funds. The company's largest shareholder is FMR LLC, with ownership of 11%. In comparison, the second and third largest shareholders hold about 11% and 8.7% of the stock. In addition, we found that John Idol, the CEO has 1.8% of the shares allocated to their name.

A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Capri 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. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own some shares in Capri Holdings Limited. The insiders have a meaningful stake worth US$84m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

With 9.4% ownership, the general public, mostly comprising of individual investors, are a relatively smaller ownership class in Capri Holdings. Thus, only a relatively small part of the company is held by retail investors. Since they are only a small group of shareholders in the company, there's little they can do if their interests are not prioritized.

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 Capri Holdings is showing 1 warning sign in our investment analysis , you should know about...

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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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