Institutional investors in Pine Island Acquisition Corp. (NYSE:PIPP) have had a wonderful week after share price increased 11%

By
Simply Wall St
Published
November 18, 2021
NYSE:PIPP
Source: Shutterstock

Every investor in Pine Island Acquisition Corp. (NYSE:PIPP) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, institutional investors scored the highest last week as the company hit US$297m market cap following a 11% gain in the stock.

Let's delve deeper into each type of owner of Pine Island Acquisition, beginning with the chart below.

Check out our latest analysis for Pine Island Acquisition

ownership-breakdown
NYSE:PIPP Ownership Breakdown November 19th 2021

What Does The Institutional Ownership Tell Us About Pine Island Acquisition?

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 Pine Island Acquisition. 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. 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 Pine Island Acquisition's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NYSE:PIPP Earnings and Revenue Growth November 19th 2021

Hedge funds don't have many shares in Pine Island Acquisition. Looking at our data, we can see that the largest shareholder is Pine Island Sponsor LLC with 20% of shares outstanding. D. E. Shaw & Co., L.P. is the second largest shareholder owning 3.8% of common stock, and Citadel Advisors LLC holds about 3.3% of the company stock.

A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 50% 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. 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 Pine Island Acquisition

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own less than 1% of Pine Island Acquisition Corp.. However, it's possible that insiders might have an indirect interest through a more complex structure. It seems the board members have no more than US$327k worth of shares in the US$297m company. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Pine Island Acquisition. 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.

Private Company Ownership

We can see that Private Companies own 20%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 instance, we've identified 2 warning signs for Pine Island Acquisition (1 can't be ignored) that you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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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