SkyWater Technology, Inc.'s (NASDAQ:SKYT) one-year returns climbed after last week's 14% gain, institutional investors must be happy

Key Insights

• Institutions' substantial holdings in SkyWater Technology implies that they have significant influence over the company's share price
• A total of 5 investors have a majority stake in the company with 53% ownership
• Recent sales by insiders

If you want to know who really controls SkyWater Technology, Inc. (NASDAQ:SKYT), then you'll have to look at the makeup of its share registry. With 28% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And as as result, institutional investors reaped the most rewards after the company's stock price gained 14% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 7.0%.

Let's take a closer look to see what the different types of shareholders can tell us about SkyWater Technology.

See our latest analysis for SkyWater Technology

What Does The Institutional Ownership Tell Us About SkyWater Technology?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in SkyWater Technology. 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. 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 SkyWater Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in SkyWater Technology. The company's largest shareholder is Oxbow Industries, LLC, with ownership of 27%. In comparison, the second and third largest shareholders hold about 11% and 8.2% of the stock. Additionally, the company's CEO Thomas Sonderman directly holds 0.9% of the total shares outstanding.

On looking further, we found that 53% 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 studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of SkyWater Technology

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders maintain a significant holding in SkyWater Technology, Inc.. It has a market capitalization of just US$478m, and insiders have US$117m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SkyWater Technology. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

With a stake of 27%, private equity firms could influence the SkyWater Technology board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand SkyWater Technology better, we need to consider many other factors. For instance, we've identified 2 warning signs for SkyWater Technology that 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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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.