Institutional investors control 41% of Compass, Inc. (NYSE:COMP) and were rewarded last week after stock increased 7.1%

Compass, Inc. Class A Common Stock +8.24%

Compass, Inc. Class A Common Stock

COMP

3.94

+8.24%

Key Insights

  • Significantly high institutional ownership implies Compass' stock price is sensitive to their trading actions
  • The top 10 shareholders own 51% of the company
  • Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

Every investor in Compass, Inc. (NYSE:COMP) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And as as result, institutional investors reaped the most rewards after the company's stock price gained 7.1% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 11%.

Let's take a closer look to see what the different types of shareholders can tell us about Compass.

See our latest analysis for Compass

ownership-breakdown
NYSE:COMP Ownership Breakdown March 30th 2024

What Does The Institutional Ownership Tell Us About Compass?

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.

Compass already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Compass' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NYSE:COMP Earnings and Revenue Growth March 30th 2024

Compass is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is SoftBank Investment Advisers (UK) Limited with 19% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 5.7%, of the shares outstanding, respectively. Robert Reffkin, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We did some more digging and found that 10 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Compass

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can see that insiders own shares in Compass, Inc.. The insiders have a meaningful stake worth US$112m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 34% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 19%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Compass better, we need to consider many other factors. For instance, we've identified 2 warning signs for Compass that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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