Home Hedge Funds With 61% ownership of the shares, Snowflake Inc. (NYSE:SNOW) is heavily dominated...

With 61% ownership of the shares, Snowflake Inc. (NYSE:SNOW) is heavily dominated by institutional owners

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NYSE:SNOW

Every investor in Snowflake Inc. (NYSE:SNOW) should be aware of the most powerful shareholder groups. With 61% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

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. 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 Snowflake.

View our latest analysis for Snowflake

ownership-breakdown
NYSE:SNOW Ownership Breakdown June 19th 2022

What Does The Institutional Ownership Tell Us About Snowflake?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Snowflake does have institutional investors; and they hold a good portion of the company’s stock. 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 Snowflake, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NYSE:SNOW Earnings and Revenue Growth June 19th 2022

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. It would appear that 5.4% of Snowflake shares are controlled by hedge funds. 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. Our data shows that ICONIQ Capital, LLC is the largest shareholder with 7.7% of shares outstanding. Altimeter Capital Management, LP is the second largest shareholder owning 5.4% of common stock, and The Vanguard Group, Inc. holds about 4.8% of the company stock.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 15 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Snowflake

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 information suggests that insiders maintain a significant holding in Snowflake Inc.. It is very interesting to see that insiders have a meaningful US$4.8b stake in this US$38b business. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Snowflake. 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:

It’s always worth thinking about the different groups who own shares in a company. But to understand Snowflake better, we need to consider many other factors. Case in point: We’ve spotted 3 warning signs for Snowflake you should be aware of.

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.

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.

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