With 76% ownership in CAVA Group, Inc. (NYSE:CAVA), institutional investors have a lot riding on the business

Key Insights

• Institutions' substantial holdings in CAVA Group implies that they have significant influence over the company's share price
• The top 12 shareholders own 51% of the company
• Insiders have been selling lately

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

If you want to know who really controls CAVA Group, Inc. (NYSE:CAVA), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 76% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And things are looking up for institutional investors after the company gained US$313m in market cap last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 18%.

Let's delve deeper into each type of owner of CAVA Group, beginning with the chart below.

View our latest analysis for CAVA Group

What Does The Institutional Ownership Tell Us About CAVA Group?

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.

CAVA Group 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 CAVA Group's earnings history below. Of course, the future is what really matters.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in CAVA Group. The company's largest shareholder is Artal Group S.A., with ownership of 8.2%. Meanwhile, the second and third largest shareholders, hold 7.8% and 7.4%, of the shares outstanding, respectively. In addition, we found that Brett Schulman, the CEO has 1.1% of the shares allocated to their name.

A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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 CAVA Group

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.

Shareholders would probably be interested to learn that insiders own shares in CAVA Group, Inc.. Insiders own US$193m worth of shares (at current prices). we sometimes take an interest in whether they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 14% stake in CAVA Group. 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.

Private Equity Ownership

Private equity firms hold a 8.2% stake in CAVA Group. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

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 - CAVA Group has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.