NASDAQ:VRM) have power over the company. 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″>The big shareholder groups in Vroom, Inc. (NASDAQ:VRM) have power over the company. 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.
Vroom has a market capitalization of US$6.9b, 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. In the chart below, we can see that institutions are noticeable on the share registry. Let’s take a closer look to see what the different types of shareholders can tell us about Vroom.
View our latest analysis for Vroom ” data-reactid=”30″> View our latest analysis for Vroom
What Does The Institutional Ownership Tell Us About Vroom?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
Vroom 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. 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 Vroom’s earnings history below. Of course, the future is what really matters.
Hedge funds don’t have many shares in Vroom. T. Rowe Price Group, Inc. is currently the largest shareholder, with 13% of shares outstanding. With 5.7% and 5.1% of the shares outstanding respectively, Cascade Investment, L.L.C. and General Catalyst Partners are the second and third largest shareholders.
Our studies suggest that the top 25 shareholders collectively control less than half of the company’s shares, meaning that the company’s shares are widely disseminated and there is no dominant shareholder.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Vroom
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
click here to see if insiders have been buying or selling. ” data-reactid=”72″>Our data suggests that insiders own under 1% of Vroom, Inc. in their own names. Keep in mind that it’s a big company, and the insiders own US$35m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public holds a 26% stake in Vroom. 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 Equity Ownership
With an ownership of 25%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Public Company Ownership
We can see that public companies hold 4.3% of the Vroom shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
Next Steps:
2 warning signs for Vroom you should know about.” data-reactid=”80″>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. Consider risks, for instance. Every company has them, and we’ve spotted 2 warning signs for Vroom you should know about.
report on analyst forecasts.” data-reactid=”81″>If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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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