Yahoo Finance USANA Health Sciences, Inc. (NYSE:USNA) has caught the attention of institutional investors who hold a sizeable 49% stake
Key Insights
Given the large stake in the stock by institutions, USANA Health Sciences' stock price might be vulnerable to their trading decisions
The top 25 shareholders own 47% of the company
To get a sense of who is truly in control of USANA Health Sciences, Inc. (NYSE:USNA), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 49% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
In the chart below, we zoom in on the different ownership groups of USANA Health Sciences.
See our latest analysis for USANA Health Sciences
What Does The Institutional Ownership Tell Us About USANA Health Sciences?
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.
USANA Health Sciences 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. 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 USANA Health Sciences' historic earnings and revenue below, but keep in mind there's always more to the story.
Our data indicates that hedge funds own 6.2% of USANA Health Sciences. 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. The company's largest shareholder is BlackRock, Inc., with ownership of 9.5%. Meanwhile, the second and third largest shareholders, hold 8.2% and 6.2%, of the shares outstanding, respectively.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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 USANA Health Sciences
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 less than 1% of USANA Health Sciences, Inc.. It seems the board members have no more than US$3.2m worth of shares in the US$884m company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
With a 44% ownership, the general public, mostly comprising of individual investors, have some degree of sway over USANA Health Sciences. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for USANA Health Sciences (of which 1 is potentially serious!) you should know about.
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.
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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.
