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Every investor in NVE Corporation ( NASDAQ:NVEC
) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies,pigeonholing a bill while it’s not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.
With a market capitalization of US$424m, NVE is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholder can tell us about NVEC.
See our latest analysis for NVE NasdaqCM:NVEC Ownership Summary January 1st 19 What Does The Institutional Ownership Tell Us About NVE? 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. We can see that NVE does have institutional investors; and they hold 76% of the 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 NVE’s earnings history, below. Of course, the future is what really matters. NasdaqCM:NVEC Income Statement Export January 1st 19 Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don’t have a meaningful investment in NVE. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar. Insider Ownership Of NVE 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. 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. We can see that insiders own shares in NVE Corporation. It has a market capitalization of just US$424m, and insiders have US$7.9m 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. Story continues General Public Ownership With a 22% ownership, the general public have some degree of sway over NVEC. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies. Next Steps: 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. I always like to check for a history of revenue growth . You can too, by accessing this free chart of historic revenue and earnings in this detailed graph . Of course this may not be the best stock to buy . So take a peek at this free free list of interesting companies. 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. To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements. The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at . View comments |
