Stock Analysis

American Superconductor Corporation's (NASDAQ:AMSC) market cap dropped US$22m last week; individual investors who hold 46% were hit as were institutions

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Key Insights

  • Significant control over American Superconductor by retail investors implies that the general public has more power to influence management and governance-related decisions
  • The top 25 shareholders own 50% of the company
  • Insiders have bought recently

A look at the shareholders of American Superconductor Corporation (NASDAQ:AMSC) can tell us which group is most powerful. With 46% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of retail investors took a hit after last week’s 13% price drop, institutions with their 41% holdings also suffered.

In the chart below, we zoom in on the different ownership groups of American Superconductor.

Check out our latest analysis for American Superconductor

NasdaqGS:AMSC Ownership Breakdown March 15th 2023

What Does The Institutional Ownership Tell Us About American Superconductor?

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

We can see that American Superconductor 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 American Superconductor, (below). Of course, keep in mind that there are other factors to consider, too.

NasdaqGS:AMSC Earnings and Revenue Growth March 15th 2023

Our data indicates that hedge funds own 8.6% of American Superconductor. 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. AWM Investment Company Inc is currently the largest shareholder, with 8.6% of shares outstanding. Royce & Associates, LP is the second largest shareholder owning 5.6% of common stock, and Baillie Gifford & Co. holds about 5.1% of the company stock. Furthermore, CEO Daniel McGahn is the owner of 3.2% of the company's shares.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of American Superconductor

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 American Superconductor Corporation. As individuals, the insiders collectively own US$6.8m worth of the US$143m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 46% stake in the company, and hence can't 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. For example, we've discovered 4 warning signs for American Superconductor (1 is significant!) that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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