Could Amazoncom Inc’s (NASDAQ:AMZN) Investor Composition Influence The Stock Price?

A look at the shareholders of Amazoncom Inc (NASDAQ:AMZN) 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. 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.’

Amazon.com is a pretty big company. It has a market capitalization of US$826b. Normally institutions would own a significant portion of a company this size. In the chart below below, we can see that institutions own shares in the company. Let’s delve deeper into each type of owner, to discover more about AMZN.

View our latest analysis for Amazon.com

NasdaqGS:AMZN Ownership Summary December 4th 18
NasdaqGS:AMZN Ownership Summary December 4th 18

What Does The Institutional Ownership Tell Us About Amazon.com?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Amazon.com already has institutions on the share registry. Indeed, they own 57% of the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Amazon.com, (below). Of course, keep in mind that there are other factors to consider, too.

NasdaqGS:AMZN Income Statement Export December 4th 18
NasdaqGS:AMZN Income Statement Export December 4th 18

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

Insider Ownership Of Amazon.com

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders maintain a significant holding in Amazoncom Inc. It has a market capitalization of just US$826b, and insiders have US$134b worth of shares in their own names. That’s quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 27% ownership, the general public have some degree of sway over AMZN. 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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.