Aviat Networks, Inc.'s (NASDAQ:AVNW) institutional investors lost 10% over the past week but have profited from longer-term gains

By
Simply Wall St
Published
January 22, 2022
NasdaqGS:AVNW
Source: Shutterstock

A look at the shareholders of Aviat Networks, Inc. (NASDAQ:AVNW) can tell us which group is most powerful. With 56% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 10% last week. Still, the 50% one-year gains may have helped mitigate their overall losses. We would assume however, that they would be on the lookout for weakness in the future.

In the chart below, we zoom in on the different ownership groups of Aviat Networks.

Check out our latest analysis for Aviat Networks

ownership-breakdown
NasdaqGS:AVNW Ownership Breakdown January 22nd 2022

What Does The Institutional Ownership Tell Us About Aviat Networks?

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

earnings-and-revenue-growth
NasdaqGS:AVNW Earnings and Revenue Growth January 22nd 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 Aviat Networks. Aigh Capital Management, LLC is currently the largest shareholder, with 5.0% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.9% and 4.6% of the stock. In addition, we found that Peter Smith, the CEO has 0.5% of the shares allocated to their name.

A closer look at our ownership figures suggests that the top 24 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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

Insider Ownership Of Aviat Networks

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.

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.

We can report that insiders do own shares in Aviat Networks, Inc.. It has a market capitalization of just US$315m, and insiders have US$14m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Aviat Networks. 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.

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. Take risks for example - Aviat Networks has 3 warning signs (and 2 which are concerning) we think you should know about.

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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