What type of shareholders make up the share register of Shenandoah Telecommunications Company (NASDAQ:SHEN)?

A look at the shareholders of Shenandoah Telecommunications Company (NASDAQ:SHEN) can tell us which group is more powerful. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time. We also tend to see a decline in insider participation in companies that were previously public.

With a market capitalization of $1.1 billion, Shenandoah Telecommunications is a decent size, so it’s probably on the radar of institutional investors. In the chart below, we can see that institutional investors have bought the company. Let’s take a closer look at what different types of shareholders can tell us about Shenandoah Telecommunications.

NasdaqGS: Distribution of SHEN ownership on February 11, 2022

What does institutional ownership tell us about Shenandoah Telecommunications?

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

We can see that Shenandoah Telecommunications has institutional investors; and they own a good part of the shares of the company. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. It is therefore worth checking the past earnings trajectory of Shenandoah Telecommunications (below). Of course, keep in mind that there are other factors to consider as well.

earnings-and-revenue-growth
NasdaqGS: SHEN Earnings and Revenue Growth February 11, 2022

Since institutional investors own more than half of the issued shares, the board will likely have to pay attention to their preferences. We note that hedge funds have no significant investment in Shenandoah Telecommunications. BlackRock, Inc. is currently the largest shareholder, with 16% of shares outstanding. Meanwhile, the second and third largest shareholders hold 9.8% and 3.6% of the outstanding shares respectively. Christopher French, who is the third shareholder, also holds the title of Chairman of the Board.

A closer look at our ownership figures suggests that the top 17 shareholders hold a combined ownership of 50%, implying that no single shareholder has a majority.

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. There are a reasonable number of analysts covering the stock, so it might be useful to know their overall view on the future.

Insider ownership of Shenandoah Telecommunications

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.

Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.

We can see insiders holding shares in Shenandoah Telecommunications Company. It’s a pretty big company, so it’s generally a positive to see a potentially meaningful alignment. In this case, they own about $46 million worth of stock (at today’s prices). It’s good to see this level of investment by insiders. You can check here if these insiders have bought recently.

General public property

With a 39% stake, the general public, consisting primarily of individual investors, has some influence over Shenandoah Telecommunications. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Next steps:

I find it very interesting to see who exactly owns a company. But to really get insight, we also need to consider other information. Like risks, for example. Every business has them, and we’ve spotted 2 warning signs for Shenandoah Telecommunications (1 of which is a little worrying!) that you should know about.

Ultimately 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 in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.

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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Sean B. Jackson