With 59% ownership of the shares, Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) is heavily dominated by institutional owners
editorial-team@simplywallst.com (Simply Wall St)
4 min read
Key Insights
Significantly high institutional ownership implies Universal Stainless & Alloy Products' stock price is sensitive to their trading actions
51% of the business is held by the top 17 shareholders
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
If you want to know who really controls Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 59% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
In the chart below, we zoom in on the different ownership groups of Universal Stainless & Alloy Products.
NasdaqGS:USAP Ownership Breakdown November 13th 2023
What Does The Institutional Ownership Tell Us About Universal Stainless & Alloy Products?
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.
We can see that Universal Stainless & Alloy Products does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Universal Stainless & Alloy Products, (below). Of course, keep in mind that there are other factors to consider, too.
NasdaqGS:USAP Earnings and Revenue Growth November 13th 2023
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Universal Stainless & Alloy Products is not owned by hedge funds. The company's largest shareholder is Minerva Advisors LLC, with ownership of 8.1%. Meanwhile, the second and third largest shareholders, hold 5.1% and 4.7%, of the shares outstanding, respectively. Furthermore, CEO Christopher Zimmer is the owner of 1.6% of the company's shares.
A closer look at our ownership figures suggests that the top 17 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Universal Stainless & Alloy Products
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own some shares in Universal Stainless & Alloy Products, Inc.. It has a market capitalization of just US$138m, and insiders have US$11m worth of shares, in their own names. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 34% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Universal Stainless & Alloy Products. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
