Stock Analysis

With 75% ownership, Bristol-Myers Squibb Company (NYSE:BMY) boasts of strong institutional backing

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NYSE:BMY
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If you want to know who really controls Bristol-Myers Squibb Company (NYSE:BMY), then you'll have to look at the makeup of its share registry. With 75% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

Let's take a closer look to see what the different types of shareholders can tell us about Bristol-Myers Squibb.

Check out our latest analysis for Bristol-Myers Squibb

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NYSE:BMY Ownership Breakdown December 8th 2022

What Does The Institutional Ownership Tell Us About Bristol-Myers Squibb?

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 Bristol-Myers Squibb does have institutional investors; and they hold a good portion of the company's stock. 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 Bristol-Myers Squibb's earnings history below. Of course, the future is what really matters.

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NYSE:BMY Earnings and Revenue Growth December 8th 2022

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 Bristol-Myers Squibb. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 9.0%. For context, the second largest shareholder holds about 7.8% of the shares outstanding, followed by an ownership of 4.2% by the third-largest shareholder.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Bristol-Myers Squibb

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 less than 1% of Bristol-Myers Squibb Company. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own US$111m worth of shares. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Bristol-Myers Squibb. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Bristol-Myers Squibb has 3 warning signs we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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