Institutions' substantial holdings in WaFd implies that they have significant influence over the company's share price
51% of the business is held by the top 16 shareholders
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
Every investor in WaFd, Inc (NASDAQ:WAFD) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 67% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And institutional investors saw their holdings value drop by 3.8% last week. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 3.3% for shareholders. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the decline continues, institutional investors may be pressured to sell WaFd which might hurt individual investors.
Let's take a closer look to see what the different types of shareholders can tell us about WaFd.
What Does The Institutional Ownership Tell Us About WaFd?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in WaFd. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see WaFd's historic earnings and revenue below, but keep in mind there's always more to the story.
NasdaqGS:WAFD Earnings and Revenue Growth April 4th 2024
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. WaFd is not owned by hedge funds. BlackRock, Inc. is currently the company's largest shareholder with 11% of shares outstanding. For context, the second largest shareholder holds about 9.5% of the shares outstanding, followed by an ownership of 6.4% by the third-largest shareholder.
A closer look at our ownership figures suggests that the top 16 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of WaFd
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
We can report that insiders do own shares in WaFd, Inc. This is a big company, so it is good to see this level of alignment. Insiders own US$31m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 32% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand WaFd better, we need to consider many other factors. Take risks for example - WaFd has 1 warning sign we think you should be aware of.
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.
