Stock Analysis

Are Institutions Heavily Invested In IDEXX Laboratories, Inc.'s (NASDAQ:IDXX) Shares?

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NasdaqGS:IDXX
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Every investor in IDEXX Laboratories, Inc. (NASDAQ:IDXX) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

IDEXX Laboratories has a market capitalization of US$41b, so it's too big to fly under the radar. We'd expect to see both institutions and retail investors owning a portion of the company. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about IDEXX Laboratories.

View our latest analysis for IDEXX Laboratories

ownership-breakdown
NasdaqGS:IDXX Ownership Breakdown March 21st 2021

What Does The Institutional Ownership Tell Us About IDEXX Laboratories?

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 IDEXX Laboratories. 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 IDEXX Laboratories' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGS:IDXX Earnings and Revenue Growth March 21st 2021

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in IDEXX Laboratories. The Vanguard Group, Inc. is currently the largest shareholder, with 11% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 9.2% of common stock, and Fundsmith, LLP holds about 4.9% of the company stock.

After doing some more digging, we found that the top 18 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of IDEXX Laboratories

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.

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 IDEXX Laboratories, Inc.. It is a very large company, and board members collectively own US$422m worth of shares (at current prices). I sometimes take an interest in whether they have been buying or selling.

General Public Ownership

With a 11% ownership, the general public have some degree of sway over IDEXX Laboratories. 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. For example, we've discovered 2 warning signs for IDEXX Laboratories that you should be aware of before investing here.

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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