O'Reilly Automotive, Inc. (NASDAQ:ORLY) is favoured by institutional owners who hold 87% of the company
If you want to know who really controls O'Reilly Automotive, Inc. (NASDAQ:ORLY), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 87% 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).
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. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
In the chart below, we zoom in on the different ownership groups of O'Reilly Automotive.
See our latest analysis for O'Reilly Automotive
What Does The Institutional Ownership Tell Us About O'Reilly Automotive?
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 O'Reilly Automotive 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. 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 O'Reilly Automotive's earnings history below. Of course, the future is what really matters.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in O'Reilly Automotive. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 8.5% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.3% and 4.1%, of the shares outstanding, respectively.
After doing some more digging, we found that the top 23 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.
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 O'Reilly Automotive
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.
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.
Shareholders would probably be interested to learn that insiders own shares in O'Reilly Automotive, Inc.. Insiders own US$558m worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 12% stake in O'Reilly Automotive. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand O'Reilly Automotive better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for O'Reilly Automotive you should be aware of, and 1 of them shouldn't be ignored.
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.
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