NASDAQ:TMUS) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.” data-reactid=”28″>Every investor in T-Mobile US, Inc. (NASDAQ:TMUS) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.
T-Mobile US has a market capitalization of US$150b, so it’s too big to fly under the radar. We’d expect to see both institutions and retail investors owning a portion of the company. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let’s delve deeper into each type of owner, to discover more about T-Mobile US.
Check out our latest analysis for T-Mobile US ” data-reactid=”30″>Check out our latest analysis for T-Mobile US
What Does The Institutional Ownership Tell Us About T-Mobile US?
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.
T-Mobile US already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 T-Mobile US’s historic earnings and revenue, below, but keep in mind there’s always more to the story.
T-Mobile US is not owned by hedge funds. Deutsche Telekom AG is currently the company’s largest shareholder with 39% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.0% and 2.4% of the stock.
After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company’s shares, implying that they have considerable power to influence the company’s decisions.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of T-Mobile US
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
see if those insiders have been buying or selling. ” data-reactid=”72″>Our data suggests that insiders own under 1% of T-Mobile US, Inc. in their own names. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own US$1.3b worth of shares (at current prices). In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.
General Public Ownership
The general public holds a 28% stake in TMUS. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Equity Ownership
With a stake of 9.0%, private equity firms could influence the TMUS board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and — as the name suggests — don’t invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Public Company Ownership
We can see that public companies hold 39%, of the T-Mobile US shares on issue. We can’t be certain, but this is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
We’ve identified 2 warning signs with T-Mobile US (at least 1 which can’t be ignored) , and understanding them should be part of your investment process.” data-reactid=”80″>It’s always worth thinking about the different groups who own shares in a company. But to understand T-Mobile US better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We’ve identified 2 warning signs with T-Mobile US (at least 1 which can’t be ignored) , and understanding them should be part of your investment process.
this free report showing analyst forecasts for its future.” data-reactid=”81″>If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”83″>This article by Simply Wall St is general in nature. 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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