Australia Markets close in 5 hrs 16 mins
  • ALL ORDS

    7,151.90
    +66.80 (+0.94%)
     
  • ASX 200

    6,964.80
    +66.30 (+0.96%)
     
  • AUD/USD

    0.6716
    +0.0017 (+0.2572%)
     
  • OIL

    67.44
    -0.20 (-0.30%)
     
  • GOLD

    1,981.50
    -1.30 (-0.07%)
     
  • BTC-AUD

    41,313.34
    -499.19 (-1.19%)
     
  • CMC Crypto 200

    606.97
    +7.30 (+1.22%)
     
  • AUD/EUR

    0.6262
    -0.0015 (-0.25%)
     
  • AUD/NZD

    1.0758
    +0.0081 (+0.76%)
     
  • NZX 50

    11,564.69
    -0.06 (-0.00%)
     
  • NASDAQ

    12,562.61
    +42.73 (+0.34%)
     
  • FTSE

    7,403.85
    +68.45 (+0.93%)
     
  • Dow Jones

    32,244.58
    +382.60 (+1.20%)
     
  • DAX

    14,933.38
    +165.18 (+1.12%)
     
  • Hang Seng

    19,000.71
    -517.88 (-2.65%)
     
  • NIKKEI 225

    26,945.67
    -388.12 (-1.42%)
     

Western Digital Corporation (NASDAQ:WDC) institutional owners may be pleased with recent gains after 9.9% loss over the past year

Every investor in Western Digital Corporation (NASDAQ:WDC) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 89% to be precise, is institutions. 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 US$2.1b market cap gain would probably be appreciated by institutional investors, especially after a year of 9.9% losses.

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

See our latest analysis for Western Digital

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Western Digital?

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.

Western Digital already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Western Digital, (below). Of course, keep in mind that there are other factors to consider, too.

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. Western Digital is not owned by hedge funds. The Vanguard Group, Inc. is currently the company's largest shareholder with 12% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.9% and 3.9%, of the shares outstanding, respectively.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 16 shareholders, meaning that no single shareholder has a majority interest in the ownership.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Western Digital

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that Western Digital Corporation insiders own under 1% of the company. 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$56m 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 Western Digital. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Western Digital (1 is significant!) that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here