If you want to know who really controls Global Payments Inc. Then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 89% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And so it follows that institutional investors was the group most impacted after the company's market cap fell to US$26b last week after a 11% drop in the share price. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 21% might not go down well especially with this category of shareholders. Also referred to as “smart money”, institutions have a lot of sway over how a stock's price moves. Hence, if weakness in Global Payments' share price continues, institutional investors may feel compelled to sell the stock, which might not be ideal for individual investors.
What Does The Institutional Ownership Tell Us About Global Payments?
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.
We can see that Global Payments does have institutional investors; and they hold a good portion of the company's stock. 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 Global Payments' earnings history below. Of course, the future is what really matters.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Global Payments is not owned by hedge funds. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 10%. BlackRock, Inc. is the second largest shareholder owning 7.6% of common stock, and Wellington Management Group LLP holds about 5.7% of the company stock.
Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 16 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Global Payments
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. 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.
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