Yahoo Finance TPG Inc.'s (NASDAQ:TPG) high institutional ownership speaks for itself as stock continues to impress, up 3.1% over last week
Key Insights
Given the large stake in the stock by institutions, TPG's stock price might be vulnerable to their trading decisions
The top 25 shareholders own 49% of the company
To get a sense of who is truly in control of TPG Inc. (NASDAQ:TPG), it is important to understand the ownership structure of the business. With 48% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
And last week, institutional investors ended up benefitting the most after the company hit US$16b in market cap. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 72%.
In the chart below, we zoom in on the different ownership groups of TPG.
See our latest analysis for TPG
What Does The Institutional Ownership Tell Us About TPG?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
As you can see, institutional investors have a fair amount of stake in TPG. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of TPG, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in TPG. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 6.0%. Temasek Holdings (Private) Limited is the second largest shareholder owning 4.6% of common stock, and BlackRock, Inc. holds about 3.8% of the company stock.
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 it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of TPG
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Shareholders would probably be interested to learn that insiders own shares in TPG Inc.. Insiders own US$1.4b worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling.
General Public Ownership
With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over TPG. 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.
Next Steps:
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 for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with TPG , and understanding them should be part of your investment process.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
