What type of shareholders make up the Costco Wholesale Corporation (NASDAQ:COST) share register?

Every investor in Costco Wholesale Corporation (NASDAQ:COST) should know the most powerful shareholder groups. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that were previously publicly owned tend to have less insider ownership.

Costco Wholesale has a market cap of US$222 billion, so it’s too big to fly under the radar. We expect institutions and retail investors to own part of the business. Looking at our ownership group data (below), it appears that institutional investors have bought the company. We can zoom in on the different ownership groups, to learn more about Costco Wholesale.

Check out our latest analysis for Costco Wholesale

NasdaqGS: Cost Ownership Breakdown July 10, 2022

What does institutional ownership tell us about Costco Wholesale?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

As you can see, institutional investors own a sizable share of Costco Wholesale. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking Costco Wholesale’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.

earnings-and-revenue-growth
NasdaqGS: COST earnings and revenue growth July 10, 2022

Institutional investors own more than 50% of the company, so together they can probably heavily influence board decisions. Hedge funds don’t have a lot of shares in Costco Wholesale. The company’s largest shareholder is The Vanguard Group, Inc., with an 8.6% stake. BlackRock, Inc. is the second largest shareholder with 7.1% of common stock and State Street Global Advisors, Inc. owns approximately 4.3% of the company’s stock.

Looking at our ownership data, we found that 25 of the major shareholders collectively own less than 50% of the share register, implying that no single individual holds a majority stake.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to know their overall view on the future.

Insider Ownership of Costco Wholesale

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.

Our information suggests Costco Wholesale Corporation insiders own less than 1% of the company. Being so large, we wouldn’t expect insiders to own a large portion of the shares. Together they own $537 million in stock. It’s good to see board members owning stock, but it can be helpful to check whether those insiders have bought.

General public property

The general public, who are usually individual investors, have a 32% stake in Costco Wholesale. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Costco Wholesale, we need to consider many other factors. Example: we have identified 1 warning sign for Costco Wholesale you should be aware.

But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Comments are closed.