Institutions profited after GrowGeneration Corp.'s (NASDAQ:GRWG) market cap rose US$12m last week but individual investors profited the most

Key Insights

• GrowGeneration's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 44% of the company
• Recent purchases by insiders

A look at the shareholders of GrowGeneration Corp. (NASDAQ:GRWG) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that benefitted the most from last week’s US$12m market cap gain, institutions too had a 42% share in those profits.

Let's delve deeper into each type of owner of GrowGeneration, beginning with the chart below.

View our latest analysis for GrowGeneration

What Does The Institutional Ownership Tell Us About GrowGeneration?

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 GrowGeneration. 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 GrowGeneration's earnings history below. Of course, the future is what really matters.

GrowGeneration is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 7.2% of shares outstanding. With 5.2% and 3.0% of the shares outstanding respectively, The Vanguard Group, Inc. and Michael Salaman are the second and third largest shareholders. Michael Salaman, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO Darren Lampert directly holds 2.7% of the total shares outstanding.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of GrowGeneration

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

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.

Shareholders would probably be interested to learn that insiders own shares in GrowGeneration Corp.. In their own names, insiders own US$9.4m worth of stock in the US$120m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public -- including retail investors -- own 50% of GrowGeneration. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand GrowGeneration better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with GrowGeneration .

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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.