Could the ownership structure of Sysco Corporation (NYSE: SYY) tell us anything useful?
A look at the shareholders of Sysco Corporation (NYSE: SYY) can tell us which group is more powerful. Institutions often own shares in larger companies, and we would expect insiders to own a noticeable percentage of smaller ones. Companies that have been privatized tend to have low insider ownership.
Sysco is a pretty big company. It has a market capitalization of 35 billion US dollars. Normally, institutions would own a significant share of a company of this size. Looking at our data on ownership groups (below), it appears that institutions own shares in the company. We can zoom in on the different property groups, to find out more about Sysco.
See our latest review for Sysco
What does institutional ownership tell us about Sysco?
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 businesses to have some institutions listed, especially if they are growing.
As you can see, institutional investors have a significant stake in Sysco. This implies that analysts working for these institutions have reviewed the action and appreciate it. But like everyone else, they could be wrong. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell shares quickly. This risk is higher in a company without a history of growth. You can see Sysco’s historical revenue and revenue below, but keep in mind that there is always more to tell.
Investors should note that institutions actually own more than half of the business, so they can collectively wield significant power. We note that the hedge funds do not have a significant investment in Sysco. The Vanguard Group, Inc. is currently the largest shareholder, with 8.5% of the shares outstanding. With 6.0% and 5.8% of the shares outstanding respectively, Wellington Management Group LLP and BlackRock, Inc. are the second and third largest shareholders.
After digging a little deeper, we found that the top 23 own a combined 51% stake in the business, suggesting that no shareholder has significant control over the business.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. There are a reasonable number of analysts covering the stock, so it can be helpful to know their overall vision for the future.
Sysco insider ownership
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that Sysco Corporation insiders own less than 1% of the company. Being so big, we wouldn’t expect insiders to own a large chunk of the shares. Collectively, they own $ 44 million in stock. It’s always good to see at least one insider property, but it may be worth checking out if those insiders have sold.
General public property
The general public, who are generally individual investors, own an 18% stake in Sysco. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.
It’s always worth thinking about the different groups that own shares in a company. But to understand Sysco better, there are many other factors that we need to consider. Concrete example: we have spotted 2 warning signs for Sysco you must be aware of this, and one of them must not be ignored.
If you are like me, you might want to ask yourself if this business will grow or shrink. Fortunately, you can check out this free report showing analysts’ forecasts for its future.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.