While institutions invested in Quantum Corporation (NASDAQ:QMCO) benefited from last week’s 87% gain, retail investors stood to gain the most
December 27, 2024
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Quantum’s significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
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A total of 25 investors have a majority stake in the company with 50% ownership
Every investor in Quantum Corporation (NASDAQ:QMCO) should be aware of the most powerful shareholder groups. We can see that retail investors own the lion’s share in the company with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
While retail investors were the group that reaped the most benefits after last week’s 87% price gain, institutions also received a 27% cut.
Let’s take a closer look to see what the different types of shareholders can tell us about Quantum.
View our latest analysis for Quantum
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.
We can see that Quantum does have institutional investors; and they hold a good portion of the company’s stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Quantum’s earnings history below. Of course, the future is what really matters.
Our data indicates that hedge funds own 18% of Quantum. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Pacific Investment Management Company LLC is currently the largest shareholder, with 11% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.9% and 7.9% of the stock. Furthermore, CEO James Lerner is the owner of 1.5% of the company’s shares.
Our studies suggest that the top 25 shareholders collectively control less than half of the company’s shares, meaning that the company’s shares are widely disseminated and there is no dominant shareholder.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Shareholders would probably be interested to learn that insiders own shares in Quantum Corporation. It has a market capitalization of just US$218m, and insiders have US$12m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
With a 50% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Quantum. 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.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we’ve discovered 6 warning signs for Quantum (3 are a bit concerning!) that you should be aware of before investing here.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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