Could The Penumbra, Inc. (NYSE:PEN) Ownership Structure Tell Us Something Useful?

By
Simply Wall St
Published
January 24, 2022
NYSE:PEN
Source: Shutterstock

Every investor in Penumbra, Inc. (NYSE:PEN) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Penumbra has a market capitalization of US$8.2b, 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. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Penumbra.

Check out our latest analysis for Penumbra

ownership-breakdown
NYSE:PEN Ownership Breakdown January 24th 2022

What Does The Institutional Ownership Tell Us About Penumbra?

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.

We can see that Penumbra does have institutional investors; and they hold a good portion of the company's stock. 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 Penumbra, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NYSE:PEN Earnings and Revenue Growth January 24th 2022

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Penumbra. Looking at our data, we can see that the largest shareholder is FMR LLC with 15% of shares outstanding. The second and third largest shareholders are Capital Research and Management Company and The Vanguard Group, Inc., with an equal amount of shares to their name at 8.8%. Additionally, the company's CEO Adam Elsesser directly holds 2.6% of the total shares outstanding.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Penumbra

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 some shares in Penumbra, Inc.. The insiders have a meaningful stake worth US$449m. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 14% 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Penumbra better, we need to consider many other factors. For example, we've discovered 3 warning signs for Penumbra that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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