Are Institutions Heavily Invested In STAAR Surgical Company's (NASDAQ:STAA) Shares?

By
Simply Wall St
Published
March 01, 2021
NasdaqGM:STAA

A look at the shareholders of STAAR Surgical Company (NASDAQ:STAA) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. We also tend to see lower insider ownership in companies that were previously publicly owned.

With a market capitalization of US$4.8b, STAAR Surgical is rather large. We'd expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about STAAR Surgical.

Check out our latest analysis for STAAR Surgical

ownership-breakdown
NasdaqGM:STAA Ownership Breakdown March 1st 2021

What Does The Institutional Ownership Tell Us About STAAR Surgical?

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.

STAAR Surgical already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 STAAR Surgical's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NasdaqGM:STAA Earnings and Revenue Growth March 1st 2021

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. It looks like hedge funds own 27% of STAAR Surgical shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Looking at our data, we can see that the largest shareholder is Broadwood Capital, Inc. with 21% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 9.0% of the stock.

On looking further, we found that 52% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of STAAR Surgical

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 most recent data indicates that insiders own less than 1% of STAAR Surgical Company. Keep in mind that it's a big company, and the insiders own US$34m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public holds a 13% stake in STAAR Surgical. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand STAAR Surgical better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with STAAR Surgical .

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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This article by Simply Wall St is general in nature. 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.
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