Every investor in Victoria's Secret & Co. (NYSE:VSCO) should be aware of the most powerful shareholder groups.And the group that holds the biggest piece of the pie are institutions with 89% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And as as result, institutional investors reaped the most rewards after the company's stock price gained 11% last week.The gains from last week would have further boosted the one-year return to shareholders which currently stand at 83%.
In the chart below, we zoom in on the different ownership groups of Victoria's Secret.
What Does The Institutional Ownership Tell Us About Victoria's Secret?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Victoria's Secret already has institutions on the share registry. Indeed, they own a respectable stake in the company.This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes.If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Victoria's Secret's earnings history below. Of course, the future is what really matters.
NYSE:VSCO Earnings and Revenue Growth December 11th 2024
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences.Hedge funds don't have many shares in Victoria's Secret.BlackRock, Inc. is currently the company's largest shareholder with 16% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 9.7%, of the shares outstanding, respectively.
We did some more digging and found that 7 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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 Victoria's Secret
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders.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.
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.
Our information suggests that insiders maintain a significant holding in Victoria's Secret & Co..It is very interesting to see that insiders have a meaningful US$395m stake in this US$3.7b business.It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Victoria's Secret better, we need to consider many other factors.For instance, we've identified 1 warning sign for Victoria's Secret that 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.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.
