Key Insights
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Institutions' substantial holdings in Watches of Switzerland Group implies that they have significant influence over the company's share price
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A total of 16 investors have a majority stake in the company with 51% ownership
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Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
Every investor in Watches of Switzerland Group PLC ( LON:WOSG ) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 84% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And institutional investors saw their holdings value drop by 7.8% last week. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 14% might not go down well especially with this category of shareholders. Often called "market movers", institutions wield significant power in influencing the price dynamics of any stock. As a result, if the decline continues, institutional investors may be pressured to sell Watches of Switzerland Group which might hurt individual investors.
In the chart below, we zoom in on the different ownership groups of Watches of Switzerland Group.
Check out our latest analysis for Watches of Switzerland Group
What Does The Institutional Ownership Tell Us About Watches of Switzerland Group?
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.
We can see that Watches of Switzerland Group does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Watches of Switzerland Group's historic earnings and revenue below, but keep in mind there's always more to the story.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Watches of Switzerland Group. BlackRock, Inc. is currently the largest shareholder, with 7.7% of shares outstanding. The second and third largest shareholders are Capital Research and Management Company and The Vanguard Group, Inc., with an equal amount of shares to their name at 5.2%. Additionally, the company's CEO Hugh Duffy directly holds 3.6% of the total shares outstanding.
After doing some more digging, we found that the top 16 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Watches of Switzerland Group
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.
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.
We can see that insiders own shares in Watches of Switzerland Group PLC. This is a big company, so it is good to see this level of alignment. Insiders own UK£50m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 10% stake in Watches of Switzerland Group. 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.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Watches of Switzerland Group .
Ultimately the future is most important. You can access this free report on analyst forecasts for the company .
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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.
