Every investor in ServiceNow, Inc. (NYSE:NOW) should be aware of the strongest shareholder base. Institutions usually hold shares in larger companies, and we want to see insiders own a significant percentage of smaller companies. Privatized companies tend to have lower insider ownership.
ServiceNow has a market value of $98b, so it is too large to fly under the radar. We want to see both institutional and retail investors own part of the company. Looking at our data on ownership groups (below), it seems that institutional investors have bought the company. Let’s take a closer look, different types of shareholders can introduce ServiceNow to us.
View our latest analysis of ServiceNow
What does agency ownership tell us about ServiceNow?
Many institutions measure their performance based on indexes close to the local market. Therefore, they usually pay more attention to the companies included in the main index.
We can see that ServiceNow does have institutional investors. They hold a large part of the company’s stock. This shows that there is a certain degree of credibility among professional investors. But we cannot just rely on this fact, because institutions sometimes make bad investments like everyone does. When multiple institutions own stocks, there is always the risk that they are in “crowded trading”. When such a transaction goes wrong, multiple parties may compete to sell shares quickly. In companies with no history of growth, this risk is even higher. You can see ServiceNow’s historical earnings and revenue below, but remember that there are always more stories.
Since institutional investors own more than half of the outstanding shares, the board may have to pay attention to their preferences. Hedge funds don’t have many shares in ServiceNow. Our data shows that T. Rowe Price Group, Inc. is the largest shareholder with 8.3% of the outstanding shares. The second and third largest shareholders are BlackRock and Pioneer Group, which have the same number of shares at 8.1%.
After more digging, we found that the top 16 owns 50% of the company’s combined ownership, which shows that no single shareholder has significant control over the company.
The institutional ownership of a research company can add value to your research. At the same time, the best way is to study the analyst’s recommendations to gain a deeper understanding of the expected performance of the stock. Many analysts have studied the stock, so it is possible to see their predictions.
Insider ownership of the service
The definition of insiders may vary slightly from country to country, but board members are always important. Management will eventually respond to the board. However, it is not uncommon for managers to be members of the executive board, especially if they are founders or CEOs.
Most people think that insider shareholding is positive because it can show that the board of directors has a good relationship with other shareholders. However, in some cases, too much energy is concentrated in this group.
Our information indicates that ServiceNow, Inc. insiders own less than 1% of the company’s shares. At this size, we would not expect insiders to own a large portion of the stock. They have a total of $384 million in stocks. At least some insider ownership is always happy, but it is worth checking whether these insiders have been selling.
Common public ownership
The general public who owns 10% of the company’s shares will not be ignored. Although this scale of ownership may not be enough to influence their policy decisions, they can still have a collective influence on company policy.
Next step:
Although it is worth considering the different groups that own a company, there are other factors that are more important. For example, consider risk.Every company has them and we have found 3 ServiceNow warning signs You should know.
If you are like me, you may want to consider whether this company will grow or shrink. Fortunately, you can view this free report, which shows analysts’ predictions for the future.
Note: The data in this article is calculated using the data of the last twelve months. The data refers to the 12 months where the financial statement date is the last day of the month. This may be inconsistent with the annual report figures for the whole year.
Promotion
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, nor does it consider your goals or financial situation. We aim to bring you long-term focused analysis driven by basic data. Please note that our analysis did not consider the latest price-sensitive company announcements or qualitative materials. Simply put, Wall Street has no position in any of the stocks mentioned.
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