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Institutional investors in The Trade Desk, Inc. (NASDAQ:TTD) lost 6.3% last week but have reaped the benefits of longer-term growth

Key Insights

  • Given the large stake in the stock by institutions, Trade Desk's stock price might be vulnerable to their trading decisions

  • The top 19 shareholders own 50% of the company

  • Insiders have sold recently

A look at the shareholders of The Trade Desk, Inc. (NASDAQ:TTD) can tell us which group is most powerful. With 72% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutional investors endured the highest losses after the company's market cap fell by US$2.7b last week. Still, the 31% one-year gains may have helped mitigate their overall losses. They should, however, be mindful of further losses in the future.

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In the chart below, we zoom in on the different ownership groups of Trade Desk.

View our latest analysis for Trade Desk

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Trade Desk?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Trade Desk already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Trade Desk's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
earnings-and-revenue-growth

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Trade Desk is not owned by hedge funds. The Vanguard Group, Inc. is currently the largest shareholder, with 8.5% of shares outstanding. Baillie Gifford & Co. is the second largest shareholder owning 8.4% of common stock, and BlackRock, Inc. holds about 4.8% of the company stock. Furthermore, CEO Jeffrey Green is the owner of 2.8% of the company's shares.

A closer look at our ownership figures suggests that the top 19 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 Trade Desk

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.

Shareholders would probably be interested to learn that insiders own shares in The Trade Desk, Inc.. The insiders have a meaningful stake worth US$1.4b. we sometimes take an interest in whether they have been buying or selling.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Trade Desk. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

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.

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.

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.