With an 80% stake, Brady Corporation (NYSE: BRC) enjoys strong institutional support

Every investor in Brady Corporation (NYSE: BRC) should know the most powerful shareholder groups. And the group that holds the biggest slice of the pie are 80%-owned institutions. In other words, the group faces the maximum upside potential (or downside risk).

Since institutional owners have a huge pool of resources and liquidity, their investment decisions tend to carry a lot of weight, especially with individual investors. Therefore, a good chunk of institutional money invested in the company is usually a huge vote of confidence in its future.

Let’s dive deeper into each Brady owner type, starting with the chart below.

NYSE: BRC Ownership Allocation August 22, 2022

What does institutional ownership tell us about Brady?

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.

Brady already has institutions on the stock register. Indeed, they hold a respectable stake in the company. 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 out Brady’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.

earnings-and-revenue-growth
NYSE: BRC Earnings and Revenue Growth August 22, 2022

Investors should note that institutions actually own more than half of the company, so they can collectively wield significant power. Hedge funds don’t have a lot of shares in Brady. Our data shows that BlackRock, Inc. is the largest shareholder with 15% of shares outstanding. With 11% and 9.9% of the shares outstanding, respectively, The Vanguard Group, Inc. and State Street Global Advisors, Inc. are the second and third largest shareholders.

Upon closer inspection, we found that more than half of the company’s shares are held by the top 6 shareholders, suggesting that the interests of the larger shareholders are to some extent balanced by those of the smaller ones.

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 can be useful to know their overall view on the future.

Brady Insider Property

The definition of an insider may differ slightly from country to country, but board members still matter. 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.

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 most recent data indicates that insiders hold shares of Brady Corporation. Insiders have a significant stake worth US$240 million. Most would see this as a real positive. It’s good to see this level of investment by insiders. You can check here if these insiders have bought recently.

General public property

The general public, who are usually individual investors, own a 10% stake in Brady. 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:

While it is worth considering the different groups that own a business, there are other, even more important factors.

Many find it useful to take an in-depth look at a company’s performance in the past. You can access this detailed graph past profits, revenue and cash flow.

At the end of the day the future is the most important. You can access this free analyst forecast report for the company.

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.

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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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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