Despite the recent sale, insiders at Samsara Inc. (NYSE:IOT) hold a 51% stake and the recent decline may have cost them dearly
A look at the shareholders of Samsara Inc. (NYSE:IOT) can tell us which group is more powerful. The group with the largest number of shares in the company, around 51% to be precise, are individual insiders. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).
Despite recent sales, insiders hold the most shares of the company. As a result, the group bore the brunt of the market capitalization loss of US$293 million last week.
Let’s take a closer look at what different types of shareholders can tell us about Samsara.
See our latest review for Samsara
What does institutional ownership tell us about Samsara?
Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
As you can see, institutional investors own a sizeable share of Samsara. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Samsara’s historical revenue and earnings below, but keep in mind there’s always more to the story.
Hedge funds don’t have a lot of shares in Samsara. From our data, we deduce that the largest shareholder is John Bicket (who also holds the title of Top Key Executive) with 22% of the shares outstanding. It’s generally considered a good sign when insiders hold a significant amount of stock in the company, and in that case, we’re happy to see a company insider act as a key stakeholder. Sanjit Biswas is the second largest shareholder with 22% of the common stock and Andreessen Horowitz LLC owns approximately 17% of the company’s stock. Interestingly, the second largest shareholder, Sanjit Biswas, is also the CEO, again, indicating strong insider ownership among the company’s major shareholders.
A more detailed study of the shareholder register showed us that 3 of the main shareholders hold a considerable stake in the company, via their 62% stake.
While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Samsara Insider Property
The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
It seems that insiders own more than half of the shares of Samsara Inc. This gives them a lot of power. Insiders hold $2.8 billion worth of stock in the $5.6 billion company. It’s extraordinary ! Most would be delighted to see the board investing alongside them. You might want to find out if they bought or sold.
General public property
With a 12% stake, the general public, consisting mostly of individual investors, has some influence over Samsara. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
Private equity ownership
Private equity firms hold a 26% stake in Samsara. This suggests that they can influence key policy decisions. Sometimes we see private capital sticking around for the long haul, but generally they have a shorter investment horizon and, as the name suggests, don’t invest heavily in public companies. After a while, they may look to sell and redeploy capital elsewhere.
While it is worth considering the different groups that own a business, there are other, even more important factors. Be aware that Samsara shows 3 warning signs in our investment analysis you should know…
At the end of the day the future is the most important. You can access this free analyst forecast report for the company.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.