Given the large stake in the stock by institutions, Digimarc's stock price might be vulnerable to their trading decisions
The top 5 shareholders own 52% of the company
Insiders have sold recently
Every investor in Digimarc Corporation (NASDAQ:DMRC) should be aware of the most powerful shareholder groups. With 43% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Last week's 9.8% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. One-year return to shareholders is currently 12% and last week's gain was the icing on the cake.
Let's delve deeper into each type of owner of Digimarc, beginning with the chart below.
NasdaqGS:DMRC Ownership Breakdown July 18th 2024
What Does The Institutional Ownership Tell Us About Digimarc?
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.
Digimarc 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. 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 Digimarc's historic earnings and revenue below, but keep in mind there's always more to the story.
NasdaqGS:DMRC Earnings and Revenue Growth July 18th 2024
It looks like hedge funds own 14% of Digimarc shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. With a 18% stake, CEO Riley McCormack is the largest shareholder. With 14% and 10% of the shares outstanding respectively, Altai Capital Management, L.P. and Vincent Smith are the second and third largest shareholders.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Digimarc
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Our most recent data indicates that insiders own a reasonable proportion of Digimarc Corporation. Insiders have a US$223m stake in this US$734m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. 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. Take risks for example - Digimarc has 3 warning signs we think you should be aware of.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
ヘッジファンドがDigimarcの株式の14%を所有しているようです。これは注目に値します。なぜなら、ヘッジファンドはしばしば管理を影響しようとする非常に積極的な投資家であり、短期または中期の株価上昇(および高い株価)を実現したいと考えている人が多いからです。最大の株主であるCEOのRiley McCormackは株の18%を所有しています。株式の14%と10%を所有するAltai Capital Management、L.P.とVincent Smithは、2番目と3番目に大きな株主です。
NasdaqGS:DMRC収益および売上高成長2024年7月18日
割り当てられている株式の18%を持つCEOのRiley McCormackは最大の株主です。ヘッジファンドはDigimarcの14%の株式を所有しており、価値創造(およびより高い株価)を短期または中期に実現しようとすることがしばしばあります。株式の14%と10%を所有するAltai Capital Management、L.P.とVincent Smithは、2番目と3番目に大きな株主です。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。