New Zealand markets close in 1 hour 27 minutes
  • NZX 50

    11,629.76
    +77.72 (+0.67%)
     
  • NZD/USD

    0.6324
    +0.0027 (+0.42%)
     
  • NZD/EUR

    0.6059
    +0.0016 (+0.27%)
     
  • ALL ORDS

    7,551.80
    +71.10 (+0.95%)
     
  • ASX 200

    7,352.10
    +67.90 (+0.93%)
     
  • OIL

    80.50
    -0.05 (-0.06%)
     
  • GOLD

    1,788.00
    +28.10 (+1.60%)
     
  • NASDAQ

    12,030.06
    +526.61 (+4.58%)
     
  • FTSE

    7,573.05
    +61.05 (+0.81%)
     
  • Dow Jones

    34,589.77
    +737.24 (+2.18%)
     
  • DAX

    14,397.04
    +41.59 (+0.29%)
     
  • Hang Seng

    18,866.23
    +269.00 (+1.45%)
     
  • NIKKEI 225

    28,255.97
    +286.98 (+1.03%)
     
  • NZD/JPY

    86.3560
    -0.5310 (-0.61%)
     

W.W. Grainger, Inc.'s (NYSE:GWW) institutional investors lost 4.4% last week but have benefitted from longer-term gains

If you want to know who really controls W.W. Grainger, Inc. (NYSE:GWW), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 73% 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).

No shareholder likes losing money on their investments, especially institutional investors who saw their holdings drop 4.4% in value last week. However, the 25% one-year return to shareholders might have softened the blow. They should, however, be mindful of further losses in the future.

Let's delve deeper into each type of owner of W.W. Grainger, beginning with the chart below.

See our latest analysis for W.W. Grainger

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About W.W. Grainger?

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 W.W. Grainger 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. 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 W.W. Grainger's earnings history below. Of course, the future is what really matters.

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. Hedge funds don't have many shares in W.W. Grainger. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 11% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 7.9% of the stock.

A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. 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 W.W. Grainger

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.

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 most recent data indicates that insiders own a reasonable proportion of W.W. Grainger, Inc.. It is very interesting to see that insiders have a meaningful US$2.7b stake in this US$25b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 16% 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.

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 W.W. Grainger 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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here