What you need to know about the investor mix of Target Corporation (NYSE: TGT)
The large shareholder groups of Target Corporation (NYSE: TGT) have power over the company. Insiders often own a large portion of younger and smaller companies, while larger companies tend to have institutions as shareholders. We also tend to see a decrease in insider ownership in companies that were previously owned by the state.
With a market cap of US $ 120 billion, Target is pretty big. We would expect to see institutional investors on the register. Companies of this size are also generally well known to retail investors. Our analysis of company ownership, below, shows that institutions own shares in the company. We can zoom in on the different property groups to learn more about Target.
See our latest analysis for Target
What does institutional ownership tell us about Target?
Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
As you can see, institutional investors own a significant stake in Target. This suggests some credibility among professional investors. But we cannot rely on this fact alone because institutions sometimes make bad investments, like everyone else. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell stocks quickly. This risk is higher in a company with no history of growth. You can see Target’s historical revenue and revenue below, but keep in mind that there is always more to tell.
Institutional investors own more than 50% of the company, so together they can likely have a strong influence on the decisions of the board. We note that hedge funds do not have a significant investment in Target. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 8.8% of the shares outstanding. For context, the second largest shareholder owns around 8.3% of the outstanding shares, followed by a 7.4% stake by the third largest shareholder.
A closer look at our ownership data shows that the top 25 shareholders collectively own less than half of the ledger, suggesting a large group of small holders where no shareholder has a majority.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. There are a reasonable number of analysts covering the stock, so it can be helpful to know their overall vision for the future.
Insider ownership of the target
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our information suggests that Target Corporation insiders own less than 1% of the company. It’s a very large company, so it would be surprising to see insiders owning a large part of the company. Although their stake is less than 1%, we can see that the board members collectively own $ 292 million in stock (at current prices). In this kind of situation, it may be more interesting to see if these insiders have bought or sold.
General public property
The general public has an 18% stake in Target. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.
While it is worth considering the different groups that own a business, there are other factors that are even more important. Consider, for example, the ever-present specter of investment risk. We have identified 1 warning sign with Target and understanding them should be part of your investment process.
Ultimately the future is the most important. You can access this free analyst forecast report for the company.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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