Key insights

• Given institutions’ large ownership of the stock, Sysco’s share price could be vulnerable to their trading decisions
• 51% of the company is owned by the 22 largest shareholders
• Analyst forecasts along with ownership data are used to provide an informed idea of ​​a company’s prospects

To get a sense of who really has control of Sysco Corporation (NYSE:SYY), it’s important to understand the company’s ownership structure. With 86% of the shares, institutions own the maximum stake in the company. This means that the group gains the most if the stock goes up (or loses the most if there is a downturn).

Because institutional investors have access to huge amounts of capital, their market movements are often closely scrutinized by retail and retail investors. Therefore, having a significant amount of institutional money invested in a company is often considered a desirable characteristic.

In the following graphic we take a closer look at the different ownership groups of Sysco.

Check out our latest analysis for Sysco

What does institutional ownership tell us about Sysco?

Many institutions measure their performance against an index that approximates the local market. That’s why they usually pay more attention to companies that are included in major indices.

Sysco already has institutions on the share register. In fact, they own a respectable stake in the company. This means the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there is always a risk that they are in a ‘crowded trade’. If such a trade fails, multiple parties may compete to sell the shares quickly. This risk is higher in a company without a growth history. You can see Sysco’s historic earnings and revenue below, but keep in mind there’s always more to the story.

Since institutional investors own more than half of the shares on issue, the board will likely need to pay attention to their preferences. Hedge funds don’t own many shares in Sysco. The company’s largest shareholder is The Vanguard Group, Inc. with an 11% stake. For comparison, the second largest shareholder holds approximately 7.6% of the outstanding shares, followed by the third largest shareholder with 5.0%.

A closer look at our ownership suggests that the top 22 shareholders have a combined ownership of 51%, meaning no single shareholder has a majority.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to find out which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting too.

Insider ownership of Sysco

While the exact definition of an insider can be subjective, almost everyone considers board members to be insiders. Senior management runs the company, but the CEO is accountable to the board, even if he or she is a member of the board.

Insider ownership is positive when it signals that leadership thinks like the true owners of the company. However, high insider ownership can also give tremendous power to a small group within the company. This can be negative under certain circumstances.

According to our information, Sysco Corporation insiders own less than 1% of the company. Because it’s a large company, we only expect insiders to own a small share of it. However, it’s worth noting that they own $79 million worth of shares. It is probably just as important to take current purchases and sales into account. You can click here to see if insiders have been buying or selling.

General public property

With a 14% stake, the general public, consisting primarily of individual investors, has some influence over Sysco. Although this size of ownership may not be enough to sway a political decision in their favor, they can still have a collective influence on company policy.

Next Steps:

While it’s certainly worth considering the different ownership groups in a company, there are other factors that are even more important. For example, consider risks. Every company has them, and we discovered them 1 warning sign for Sysco you should know that.

But ultimately it is the futurenot the past, will determine how well the owners of this company will do. That’s why we think it’s wise to take a look at this free report showing whether analysts are predicting a brighter future.

Note: The figures in this article are calculated using the last twelve months of data, which refers to the twelve-month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the full year annual report figures.

Do you have feedback on this article? Worried about the content? Get in touch directly with us. Alternatively, you can also send an email to editor-team (at) simplywallst.com.

This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term focused analysis based on fundamental data. Note that our analysis may not reflect the latest price-sensitive company announcements or qualitative material. Simply Wall St has no positions in any stocks mentioned.