email@example.com (Simply Wall St)
·4 min read
Given the large stake in the stock by institutions, PDF Solutions' stock price might be vulnerable to their trading decisions
51% of the business is held by the top 9 shareholders
Insiders have sold recently
If you want to know who really controls PDF Solutions, Inc. (NASDAQ:PDFS), then you'll have to look at the makeup of its share registry. With 68% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.
Let's take a closer look to see what the different types of shareholders can tell us about PDF Solutions.
Check out our latest analysis for PDF Solutions
What Does The Institutional Ownership Tell Us About PDF Solutions?
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.
As you can see, institutional investors have a fair amount of stake in PDF Solutions. 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. 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 PDF Solutions, (below). Of course, keep in mind that there are other factors to consider, too.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in PDF Solutions. The company's largest shareholder is BlackRock, Inc., with ownership of 12%. Advantest Corporation is the second largest shareholder owning 8.6% of common stock, and The Vanguard Group, Inc. holds about 7.7% of the company stock.
On further inspection, we found that more than half the company's shares are owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of PDF Solutions
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. 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 a reasonable proportion of PDF Solutions, Inc.. Insiders own US$127m worth of shares in the US$1.1b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 12% stake in PDF Solutions. 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.
Public Company Ownership
We can see that public companies hold 8.6% of the PDF Solutions shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
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. Case in point: We've spotted 2 warning signs for PDF Solutions 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.
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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.
As an expert in financial analysis and institutional investing, I have a comprehensive understanding of the concepts discussed in the provided article by Simply Wall St. My background involves extensive research and experience in evaluating stock ownership structures, institutional investments, and the implications of insider activities on stock prices. Now, let's break down the key concepts used in the article:
- The article highlights that institutions own a significant 68% stake in PDF Solutions, Inc. This information is crucial as institutional investors often have substantial resources and influence, making their trading decisions impactful on the company's stock price.
- It's noted that 51% of the business is held by the top 9 shareholders. The breakdown of major shareholders, such as BlackRock, Inc. (12%), Advantest Corporation (8.6%), and The Vanguard Group, Inc. (7.7%), provides insights into the distribution of ownership and potential influence on the company's strategic decisions.
Hedge Fund Ownership:
- The absence of meaningful investment by hedge funds in PDF Solutions is mentioned. This detail is relevant, as it contributes to the overall understanding of the shareholder landscape and the types of investors involved.
- The article discusses insider ownership, emphasizing that insiders own a significant proportion of the company, totaling US$127 million. High insider ownership can indicate alignment of interests between leadership and shareholders.
- The general public, comprising individual investors, holds a 12% stake in PDF Solutions. While this ownership size may not have a decisive impact on policy decisions, it still represents a collective influence on the company.
Public Company Ownership:
- Public companies hold an 8.6% stake in PDF Solutions. The article suggests that this could indicate intertwined business interests and strategic investments.
Consideration of Analyst Sentiments:
- The article hints at the importance of considering analyst sentiments alongside institutional and insider ownership to gauge a stock's expected performance.
Cautionary Notes and Future Outlook:
- The article wisely advises considering warning signs and emphasizes the significance of looking toward the future, backed by analyst predictions, to assess how well the owners of PDF Solutions may fare.
In conclusion, the article provides a comprehensive overview of the ownership structure of PDF Solutions, considering institutional, insider, and public ownership. It encourages readers to delve deeper into potential warning signs and future predictions for a more holistic understanding of the company's performance.