Tetra Tech, Inc.'s (NASDAQ:TTEK) institutional investors lost 3.3% over the past week but have profited from longer-term gains

By
Simply Wall St
Published
January 17, 2022
NasdaqGS:TTEK
Source: Shutterstock

A look at the shareholders of Tetra Tech, Inc. (NASDAQ:TTEK) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 86% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

No shareholder likes losing money on their investments, especially institutional investors who saw their holdings drop 3.3% in value last week. However, the 12% one-year return to shareholders may have helped lessen their pain. But they would probably be wary of future losses.

In the chart below, we zoom in on the different ownership groups of Tetra Tech.

See our latest analysis for Tetra Tech

ownership-breakdown
NasdaqGS:TTEK Ownership Breakdown January 17th 2022

What Does The Institutional Ownership Tell Us About Tetra Tech?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Tetra Tech. 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 Tetra Tech, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NasdaqGS:TTEK Earnings and Revenue Growth January 17th 2022

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Tetra Tech is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 12% of shares outstanding. With 9.8% and 4.8% of the shares outstanding respectively, The Vanguard Group, Inc. and AllianceBernstein L.P. are the second and third largest shareholders.

After doing some more digging, we found that the top 15 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Tetra Tech

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that Tetra Tech, Inc. insiders own under 1% of the company. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own US$77m worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 13% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Take risks for example - Tetra Tech has 2 warning signs we think you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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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