With 85% institutional ownership, Nucor Corporation (NYSE: NUE) is a favorite among the big guns
If you want to know who actually controls Nucor Corporation (NYSE: NUE), then you will need to examine the makeup of its share register. With 85% of the capital, the institutions hold the maximum number of shares in the company. In other words, the group has everything to gain (or lose the most) from its investment in the business.
Given the large amount of money and research capabilities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Therefore, having a considerable amount of institutional money invested in a business is often considered a desirable trait.
Let’s dig deeper into each type of Nucor owner, starting with the table below.
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What does institutional ownership tell us about Nucor?
Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
We can see that Nucor has institutional investors; and they own a large portion of the company’s stock. This may indicate that the company has a certain degree of credibility in the investment community. However, it is better not to rely on the so-called validation that accompanies institutional investors. They too are sometimes wrong. It is not uncommon to see a sharp drop in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out Nucor’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.
Institutional investors own more than 50% of the company, so together they can probably strongly influence the decisions of the board. Nucor does not belong to hedge funds. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 13% of the shares outstanding. With 9.5% and 8.5% of shares outstanding, respectively, State Farm Insurance Companies, Asset Management Arm and BlackRock, Inc. are the second and third largest shareholders.
Upon closer inspection, we found that more than half of the company’s shares are owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are to some extent offset by the smaller ones.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. Many analysts cover the stock, so it can be interesting to see what they are forecasting as well.
Nucor’s insider ownership
The definition of business insiders can be subjective and vary from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our information suggests that insiders of Nucor Corporation own less than 1% of the company. Since this is a large company, we would expect insiders to own only a small percentage. But it should be noted that they own shares worth US $ 162 million. Arguably recent purchases and sales are equally important to consider. You can click here to see if any Insiders have bought or sold.
General public property
The general public, who are generally individual investors, own a 19% stake in Nucor. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.
While it is worth considering the different groups that own a business, there are other factors that are even more important. Concrete example: we have spotted 1 warning sign for Nucor you must be aware.
If you’d rather find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.
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.