The major shareholders of General Motors Company (NYSE: GM) hold power over the company. Institutions often own stakes in more established companies, while it is not uncommon for insiders to own some smaller companies. We also tend to see a lower proportion of insiders in companies that were previously publicly owned.
General Motors is a pretty big company. It has a market capitalization of $ 85 billion. Typically, institutions would own a significant stake in a company of this size. A look at our owner group data (below) shows that institutions own shares in the company. Let’s take a closer look at what the various types of shareholders can tell us about General Motors.
Check out our latest analysis for General Motors
NYSE: GM Property Breakdown June 20, 2021
What does institutional ownership tell us about General Motors?
Institutional investors often compare their own returns to the returns of a frequently tracked index. As a result, they typically consider buying larger companies that are included in the relevant benchmark index.
We see that General Motors has institutional investors; and they hold a good chunk of the company’s stock. This suggests some credibility among professional investors. But we cannot rely on that alone, because institutions sometimes make bad investments, as everyone does. If several institutes own a share, there is always the risk that they are in a “crowd trade”. When such a trade goes wrong, multiple parties can compete to sell stocks quickly. This risk is higher in a company with no history of growth. You can see General Motors historical revenue and earnings below, but keep in mind that there is always more to history.
NYSE: GM earnings and revenue growth June 20, 2021
Investors should note that institutions actually own more than half of the company, so together they can exert significant power. Hedge funds don’t have a lot of shares in General Motors. Capital Research and Management Company is currently the company’s largest shareholder with 13% of the shares outstanding. In comparison, the second and third largest shareholders hold around 7.4% and 6.5% of the shares, respectively.
A look at the shareholder register shows that 51% of the property is controlled by the 13 largest shareholders, which means that no single shareholder has a controlling stake in the property.
While it makes sense to examine institutional ownership data for a company, it also makes sense to examine analyst sentiment to know which way the wind is blowing. There are a fair number of analysts covering the stock, so it might be useful to find out their aggregated view of the future.
General Motors inside ownership
The definition of corporate insider can be subjective and varies depending on the legal system. Our data reflects individual insiders and at least includes board members. The company management reports to the board of directors, who should represent the interests of the shareholders. It is noteworthy that sometimes top managers sit on the board themselves.
Insider ownership is positive when it signals that management thinks like the real owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative under certain circumstances.
Our latest data shows that insiders own less than 1% of General Motors Company. Since we’re so big, we wouldn’t expect insiders to own a large stake in the stock. Together they own shares valued at $ 125 million. It’s always good to see at least some insider ownership, but it might be worth checking to see if those insiders have sold.
General public property
With a share of 12%, the public has some influence on General Motors. While this group may not be in charge, it can certainly have a real impact on how the company is run.
It seems to us that public companies own 4.6% of General Motors. It’s hard to tell, but that suggests they have business interests intertwined. This could be a strategic investment, so it’s worth checking this area for changes in ownership.
It is always worth thinking about the different groups that own shares in a company. But to understand General Motors better, we need to consider many other factors. Notice that General Motors is showing 1 warning sign in our investment analysis , you should know that…
If you’re like me, you might want to think about whether this company is going to grow or shrink. Fortunately, you can check out this free analyst forecast report for the future.
Note: The numbers in this article are calculated using data for the past twelve months, which refers to the twelve month period ending on the last day of the month in which the financial statements are dated. This may not match the figures in the annual financial statements.
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This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which is sensitive to the price. Simply Wall St has no position in the stocks mentioned.
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