Stratasys Ltd.’s (NASDAQ:SSYS) latest 6.8% decline adds to one-year losses, institutional investors may consider drastic measures

If you want to know who Stratasys Ltd. (NYSE:BAC) really controls, you need to look at the composition of the stock register. The group with the most shares in the company, around 62%, are institutions. In other words, the group will gain the most (or lose the most) from their investment in the company.

As a result, institutional investors suffered their heaviest losses last week after the market cap fell $67 million. The recent loss, which adds to a 46% one-year loss for shareholders, may not sit well with this group of investors. Institutions or “liquidity providers” control large sums of money and therefore these types of investors usually have a large influence on stock price movements. As a result, if the downtrend continues, institutions could come under pressure to sell Stratasys, which could have a negative impact on individual investors.

In the graphic below, we zoom in on Stratasys’ different ownership groups.

Check out our latest analysis for Stratasys

What does institutional ownership tell us about Stratasys?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they’re often more excited about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially as they grow.

Stratasys already has institutions on its share register. In fact, they own a respectable stake in the company. This may indicate that the company has a certain level of credibility in the investor community. However, it’s best not to rely on the supposed confirmation that comes from institutional investors. They too are sometimes wrong. If several institutes change their opinion on a stock at the same time, the share price could fall quickly. It is therefore worth checking out Stratasys’ earnings history below. Of course, what really matters is the future.

With institutional investors owning more than half of the outstanding shares, the board likely needs to be mindful of their preferences. Stratasys is not owned by hedge funds. The company’s largest shareholder is Nano Dimension Ltd. with a share of 12%. In comparison, the second- and third-largest shareholders hold around 4.8% and 4.0% of the shares, respectively.

If we look at the register of shareholders, we can see that 51% of ownership is controlled by the 17 largest shareholders, meaning that no single shareholder has a controlling interest in the property.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiment to know which way the wind is blowing. There are many analysts covering the stock, so it might be worth seeing what they’re forecasting as well.

Insider ownership of Stratasys

While the precise definition of an insider can be subjective, almost everyone considers a board member to be an insider. The management of the company is accountable to the board of directors, which should represent the interests of the shareholders. It is noteworthy that sometimes high-ranking managers themselves sit on the board.

Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. In some cases, however, too much power is concentrated within this group.

Our latest data shows that insiders own less than 1% of Stratasys Ltd. own. It appears that the board members own no more than $6.3 million in stock in the $922 million company. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if these Insiders have bought or sold.

General Public Property

The general public, which are typically individual investors, own a 25% stake in Stratasys. While this ownership may not be sufficient to sway a policy decision in their favor, they can still collectively influence company policy.

ownership of public companies

It appears to us that public companies own 12% of Stratasys. We cannot be sure, but it is quite possible that this is a strategic investment. The companies may be similar or collaborate.

Next Steps:

I find it very interesting to see who exactly owns a company. But to really gain insight, we need to consider other information as well. Notice that Stratasys is displayed 2 warning signs in our investment analysis you should know that…

If you’d rather learn what analysts are predicting in terms of future growth, don’t miss this one free Analyst forecast report.

Note: The figures in this article are calculated using data for the last twelve months, relating to the 12-month period ending on the last date of the month to which the financial statements are dated. This may not tally with the annual report figures for the full year.

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This Simply Wall St article is of a general nature. We provide comments based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.