Stock Analysis

In the wake of The Manitowoc Company, Inc.'s (NYSE:MTW) latest US$37m market cap drop, institutional owners may be forced to take severe actions

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NYSE:MTW
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A look at the shareholders of The Manitowoc Company, Inc. (NYSE:MTW) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 77% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And so it follows that institutional investors was the group most impacted after the company's market cap fell to US$286m last week after a 11% drop in the share price. The recent loss, which adds to a one-year loss of 64% for stockholders, may not sit well with this group of investors. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. Hence, if weakness in Manitowoc Company's share price continues, institutional investors may feel compelled to sell the stock, which might not be ideal for individual investors.

Let's take a closer look to see what the different types of shareholders can tell us about Manitowoc Company.

Before we look at the ownership breakdown, you might like to know that our analysis indicates that MTW is potentially undervalued!

ownership-breakdown
NYSE:MTW Ownership Breakdown September 27th 2022

What Does The Institutional Ownership Tell Us About Manitowoc Company?

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.

As you can see, institutional investors have a fair amount of stake in Manitowoc 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Manitowoc Company's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NYSE:MTW Earnings and Revenue Growth September 27th 2022

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Manitowoc Company is not owned by hedge funds. The company's largest shareholder is BlackRock, Inc., with ownership of 11%. For context, the second largest shareholder holds about 7.2% of the shares outstanding, followed by an ownership of 6.9% by the third-largest shareholder.

A closer look at our ownership figures suggests that the top 11 shareholders have a combined ownership of 51% implying that 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 know 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 Manitowoc Company

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in The Manitowoc Company, Inc.. In their own names, insiders own US$7.3m worth of stock in the US$286m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Manitowoc Company. 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 Manitowoc Company better, we need to consider many other factors. Take risks for example - Manitowoc Company has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Manitowoc Company is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

About NYSE:MTW

Manitowoc Company

The Manitowoc Company, Inc. provides engineered lifting solutions in the Americas, Europe, Africa, the Middle East, and the Asia Pacific.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation3
Future Growth0
Past Performance1
Financial Health2
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Fair value with imperfect balance sheet.