Advertisement
New Zealand markets closed
  • NZX 50

    11,864.89
    -7.75 (-0.07%)
     
  • NZD/USD

    0.6139
    -0.0032 (-0.52%)
     
  • NZD/EUR

    0.5722
    -0.0019 (-0.34%)
     
  • ALL ORDS

    7,974.80
    -27.70 (-0.35%)
     
  • ASX 200

    7,724.30
    -25.40 (-0.33%)
     
  • OIL

    78.13
    -0.49 (-0.62%)
     
  • GOLD

    2,327.40
    +9.40 (+0.41%)
     
  • NASDAQ

    19,576.92
    +111.74 (+0.57%)
     
  • FTSE

    8,163.67
    0.00 (0.00%)
     
  • Dow Jones

    38,647.10
    -65.11 (-0.17%)
     
  • DAX

    18,265.68
    -365.18 (-1.96%)
     
  • Hang Seng

    18,005.69
    -106.94 (-0.59%)
     
  • NIKKEI 225

    38,814.56
    +94.09 (+0.24%)
     
  • NZD/JPY

    96.9850
    +0.1650 (+0.17%)
     

SmartRent, Inc. (NYSE:SMRT) is favoured by institutional owners who hold 60% of the company

Key Insights

  • Significantly high institutional ownership implies SmartRent's stock price is sensitive to their trading actions

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

  • Insiders own 12% of SmartRent

A look at the shareholders of SmartRent, Inc. (NYSE:SMRT) can tell us which group is most powerful. The group holding the most number of shares in the company, around 60% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

ADVERTISEMENT

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

Check out our latest analysis for SmartRent

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About SmartRent?

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.

As you can see, institutional investors have a fair amount of stake in SmartRent. 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 SmartRent'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

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. SmartRent is not owned by hedge funds. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 9.7%. In comparison, the second and third largest shareholders hold about 7.3% and 5.6% of the stock. Lucas Haldeman, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of SmartRent

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 a reasonable proportion of SmartRent, Inc.. It has a market capitalization of just US$499m, and insiders have US$58m worth of shares in their own names. 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 24% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 4.7%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - SmartRent has 1 warning sign we think you should be aware of.

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.