Key Insights

• Significant control over Hormel Foods by company controlled foundation implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 53% of the company
• Insiders have been selling lately

Every investor in Hormel Foods Corporation (NYSE:HRL) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 47% to be precise, is company controlled foundation. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 42% came under pressure after market cap dropped to US$17b last week,company controlled foundation took the most losses.

Let's delve deeper into each type of owner of Hormel Foods, beginning with the chart below.

View our latest analysis for Hormel Foods

What Does The Institutional Ownership Tell Us About Hormel Foods?

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 Hormel Foods 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 Hormel Foods' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Hormel Foods. The company's largest shareholder is The Hormel Foundation, Endowment Arm, with ownership of 47%. For context, the second largest shareholder holds about 6.4% of the shares outstanding, followed by an ownership of 5.1% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Hormel Foods

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 most recent data indicates that insiders own less than 1% of Hormel Foods Corporation. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own US$52m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in Hormel Foods. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Hormel Foods better, we need to consider many other factors. For example, we've discovered 1 warning sign for Hormel Foods that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.