Selective Insurance Group, Inc. (NASDAQ:SIGI) is largely controlled by institutional shareholders who own 84% of the company

Selective Insurance Group, Inc. +2.20% Pre

Selective Insurance Group, Inc.

SIGI

100.23

100.23

+2.20%

0.00% Pre

Key Insights

  • Given the large stake in the stock by institutions, Selective Insurance Group's stock price might be vulnerable to their trading decisions
  • 52% of the business is held by the top 11 shareholders
  • Insiders have been selling lately

Every investor in Selective Insurance Group, Inc. (NASDAQ:SIGI) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 84% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

In the chart below, we zoom in on the different ownership groups of Selective Insurance Group.

View our latest analysis for Selective Insurance Group

ownership-breakdown
NasdaqGS:SIGI Ownership Breakdown April 29th 2024

What Does The Institutional Ownership Tell Us About Selective Insurance Group?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Selective Insurance Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Selective Insurance Group's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NasdaqGS:SIGI Earnings and Revenue Growth April 29th 2024

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Selective Insurance Group. BlackRock, Inc. is currently the company's largest shareholder with 13% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 10% of common stock, and FMR LLC holds about 5.8% of the company stock.

Looking at the shareholder registry, we can see that 52% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Selective Insurance Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

We can report that insiders do own shares in Selective Insurance Group, Inc.. This is a big company, so it is good to see this level of alignment. Insiders own US$91m worth of shares (at current prices). 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 14% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Selective Insurance Group , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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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