Vista Outdoor Inc.’s (NYSE:VSTO) latest 3.8% decline adds to one-year losses, institutional investors may consider drastic measures

Important Findings

• Given the large holdings of institutions in the stock, Vista Outdoor’s stock price could be vulnerable to their trading decisions
• 50% of the company is held by the top 7 shareholders
• Analyst forecasts along with ownership data serve to provide a strong idea of ​​a company’s prospects

Every Vista Outdoor Inc. (NYSE:VSTO) investor should be aware of the most powerful shareholder groups. With a 78% share, institutions own the maximum shares in the company. In other words, the group is exposed to maximum upside (or downside risk).

And institutional investors suffered the heaviest losses after the company’s share price fell 3.8% last week. Needless to say, the recent loss, which further adds to shareholders’ 22% year-on-year loss, may not go down well with this particular category of shareholders. Institutions or “liquidity providers” control large sums of money and therefore these types of investors usually have a large influence on stock price movements. Consequently, if the downtrend continues, institutions could come under pressure to sell Vista Outdoor, which could have a negative impact on individual investors.

In the table below, we zoom in on the different Vista Outdoor ownership groups.

Check out our latest analysis for Vista Outdoor

What Does Institutional Ownership Tell Us About Vista Outdoor?

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.

We can see that Vista Outdoor has institutional investors; and they hold a good portion of the company’s stock. 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. It’s not uncommon for the stock price to fall sharply when two large institutional investors attempt to sell a stock at the same time. So it’s worth reviewing Vista Outdoor’s past earnings history (below). Of course, keep in mind that there are other factors to consider as well.

Institutional investors own over 50% of the company, so collectively they can likely heavily influence board decisions. Our data shows that hedge funds own 9.6% of Vista Outdoor. This is worth noting as hedge funds are often quite active investors who may be trying to influence management. Many want to see value creation (and a higher share price) in the short or medium term. BlackRock, Inc. is currently the largest shareholder with 16% of the outstanding shares. Gates Capital Management, Inc. is the second-largest shareholder with 9.6% of the common stock, and The Vanguard Group, Inc. owns about 8.9% of the company’s stock.

We investigated further and found that 7 of the top shareholders make up around 50% of the register, meaning there are some smaller shareholders alongside larger shareholders, somewhat balancing the interests of the others.

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. Quite a few analysts cover the stock, so you can easily look at the projected growth.

Insider ownership of Vista Outdoor

The definition of an insider may differ slightly from country to country, but board members always count. Management runs the business, but the CEO is accountable to the board even if he or she is a member.

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.

We can see insiders own shares in Vista Outdoor Inc. This is a big company so it’s good to see this level of alignment. Insiders own $25 million worth of stock (at current prices). It’s good to see how much is being invested by insiders. You can check if these insiders have bought recently here.

General Public Property

The general public — including individual investors — own an 11% stake in the company, so it can’t be ignored. While this group may not necessarily be in charge, it can certainly have a real impact on how the company is run.

Next Steps:

While it’s worth considering the different groups that own a business, there are other factors that are even more important. Notice that Vista Outdoor is displayed 2 warning signs in our investment analysis and 1 of them is a bit uncomfortable…

If you’re like me, you might want to think about whether this company is going to grow or shrink. Luckily, you can check out this free report that includes analyst forecasts for the future.

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.