Every investor in The Toro Company (NYSE: TTC) should know the most powerful shareholder groups. With 81% of the capital, the institutions hold the maximum number of shares in the company. In other words, the group faces the maximum upside potential (or downside risk).
Given the huge amount of money and research capabilities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Therefore, a good deal of institutional money invested in the company is usually a huge vote of confidence in its future.
Let’s dive deeper into each type of Toro owner, starting with the table below.
Check out our latest analysis for Toro
What does institutional ownership tell us about Toro?
Institutional investors typically 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.
Toro already has institutions on the stock register. Indeed, they hold a respectable stake in the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be 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 Toro’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 heavily influence board decisions. It appears that hedge funds own 5.0% of Toro shares. This is interesting because hedge funds can be very active and militant. Many are looking for medium-term catalysts that will drive the stock price higher. The Vanguard Group, Inc. is currently the largest shareholder, with 9.8% of the shares outstanding. For context, the second largest shareholder owns approximately 8.5% of the outstanding shares, followed by 5.0% ownership by the third largest shareholder.
A closer look at our ownership figures suggests that the top 13 shareholders hold a combined ownership of 51%, implying that no single shareholder has a majority.
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 a stock’s expected performance. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.
Toro Insider Ownership
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 that insiders of The Toro Company own less than 1% of the company. It’s a very big company, so it would be surprising to see insiders owning much of the company. Although their stake is less than 1%, we can see that the board members collectively own $37 million worth of stock (at today’s prices). Arguably, recent purchases and sales are equally important to consider. You can click here to see if insiders have been buying or selling.
General public property
The general public, who are usually individual investors, have a 13% stake in Toro. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
While it is worth considering the different groups that own a business, there are other, even more important factors. To this end, you should be aware of the 2 warning signs we spotted with Toro.
If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its 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.
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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.