What Type Of Shareholders Own The Most Number of NVE Corporation (NASDAQ:NVEC) Shares?

If you want to know who really controls NVE Corporation (NASDAQ:NVEC), then you’ll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

NVE is not a large company by global standards. It has a market capitalization of US$242m, which means it wouldn’t have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. Let’s delve deeper into each type of owner, to discover more about NVE.

See our latest analysis for NVE

ownership-breakdown
NasdaqCM:NVEC Ownership Breakdown September 28th 2020

What Does The Institutional Ownership Tell Us About NVE?

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.

NVE already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 NVE’s earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqCM:NVEC Earnings and Revenue Growth September 28th 2020

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. NVE is not owned by hedge funds. Kayne Anderson Rudnick Investment Management, LLC is currently the company’s largest shareholder with 13% of shares outstanding. Mairs and Power, Inc. is the second largest shareholder owning 9.6% of common stock, and BlackRock, Inc. holds about 7.9% of the company stock. Furthermore, CEO Daniel Baker is the owner of 1.7% of the company’s shares.

On further inspection, we found that more than half the company’s shares are owned by the top 10 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. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of NVE

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I can report that insiders do own shares in NVE Corporation. It has a market capitalization of just US$242m, and insiders have US$4.3m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, with a 27% stake in the company, will not easily be ignored. 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:

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 NVE you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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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