Understanding the ownership structure of the business is key to understanding the true controllers of O’Reilly Automotive, Inc. (NASDAQ:ORLY). The group with the largest shareholding in the company, about 85% to be exact, are institutional investors. In other words, the group stands to gain the most if the share price rises (or suffer the most loss if it falls).
Because institutional investors have huge pools of resources and liquidity, their investment decisions tend to be heavily influenced, especially for individual investors. Therefore, investing a significant amount of institutional money in a company is often viewed as a desirable trait.
Let’s take a closer look at each type of O’Reilly Automotive owner, starting with the table below.
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What can institutional ownership tell us about O’Reilly Automotive?
Many financial institutions measure their performance against indices that approximate local markets. As such, they typically pay more attention to companies included in major indices.
O’Reilly Automotive already has an institution on the stock register. In fact, they own a sizeable stake in the company. This indicates a certain level of credibility among professional investors. But that fact alone cannot be relied upon. Because institutional investors, like everyone else, sometimes make bad investments. When two large institutional investors try to sell their shares at the same time, it’s not uncommon for the stock price to drop significantly. As such, it’s worth taking a look at O’Reilly Automotive’s historical earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.
Investors should be aware that institutional investors actually own more than half of the company, so they collectively wield a great deal of power. O’Reilly Automotive is not owned by a hedge fund. Vanguard Group, Inc. is currently the largest shareholder, holding his 8.3% of outstanding shares. BlackRock, Inc. and State Street Global Advisors, Inc. hold 7.0% and 4.1% of the outstanding shares, respectively, and are his second and third largest shareholders.
A closer look at the ownership count reveals that the top 25 shareholders collectively own 51% of the ownership.
Researching institutional ownership of companies can add value to your research, but it’s also a good idea to research analyst recommendations to get a better understanding of the stock’s expected performance. . There are quite a few analysts who cover stocks, so it may be useful to know their collective views on the future.
Insider Ownership of O’Reilly Automotive
The definition of an insider may vary slightly from country to country, but board members are always important. Management should be responsive to the board, and the board should represent the interests of the shareholders. In particular, top-level managers may be on the board of directors.
Most people view insider ownership positively because it can indicate that the board works well with other shareholders. However, in some cases, this group may be overly privileged.
It turns out that an insider owns O’Reilly Automotive, Inc. stock. This is a very large company and in total the board members hold shares worth US$542 million (at current prices). Most would say that this shows that the interests of the shareholders and the board are aligned. Still, it might be worth checking to see if those insiders are selling.
O’Reilly Automotive owns 14% and has some influence from the public, which is mostly made up of private investors. Ownership of this magnitude is substantial, but may not be sufficient to change company policy if decisions are out of sync with other major shareholders.
It’s always worth thinking about the different groups that own shares in the company. But many other factors need to be considered to better understand O’Reilly Automotive.Taking risk as an example, O’Reilly Automotive three warning signs (and one with serious potential) you should know about.
But in the end it’s the future, not the past will determine how well the owner of this business will do. Therefore, we encourage you to check out this free report that shows whether analysts are predicting a brighter future.
Note: The numbers in this article are calculated using the last 12 months of data. This refers to his 12-month period ending on the last day of the month in which the financial statements are dated. This may not match the annual report figures for the full year.
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This article by Simply Wall St is general in nature. We provide comments based on historical data and analyst projections using only unbiased methodologies and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. We aim to deliver long-term focused analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Is not …