Blue Bird Corporation (NASDAQ:BLBD)’s high institutional ownership speaks for itself as the stock continues to impress, up 3.6% from last week

Key findings

• Significantly high institutional ownership implies that Blue Bird’s share price is sensitive to their trading activities
• The 20 largest shareholders own 51% of the company
• Insiders recently sold

Any investor in Blue Bird Corporation (NASDAQ:BLBD) should know who the most powerful shareholder groups are. And the group that holds the largest piece of the pie is institutions, with 89% of shares. In other words, this group stands to gain the most (or lose the most) from their investment in the company.

And things are looking good for institutional investors after the company gained $56 million in market capitalization last week. The return to shareholders is currently 135% and last week’s gain was the icing on the cake.

In the graphic below we zoom in on the different ownership groups of Blue Bird.

Check out our latest analysis for Blue Bird

What does institutional ownership tell us about Blue Bird?

Many institutions measure their performance against an index that is similar to the local market, so they tend to pay more attention to companies listed in major indices.

We can see that Blue Bird has institutional investors; and they hold a good portion of the company’s shares. This suggests some credibility among professional investors. But we cannot rely on this fact alone, as institutions sometimes make bad investments, just like everyone else does. If multiple institutions change their minds on a stock at the same time, the share price can drop quickly. So it’s worth taking a look at Blue Bird’s earnings history below. Of course, the future is what really matters.

Since institutional investors own more than half of the outstanding shares, the board will likely need to pay attention to their preferences. We note that hedge funds do not have significant investments in Blue Bird. BlackRock, Inc. is currently the largest shareholder with 7.4% of the outstanding shares. The second and third largest shareholders hold 6.7% and 4.0% of the outstanding shares, respectively.

After thorough research, we found that the top 20 collectively own 51% of the company. This suggests that no single shareholder has significant control over the company.

While studying institutional ownership of a company can enrich your research, it is also a good practice to research analyst recommendations to get a deeper understanding of a stock’s expected performance. There are a considerable number of analysts covering the stock, so it could be useful to find out their overall view on the future.

Insider ownership of Blue Bird

While the exact definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management runs the business, but the CEO is responsible to the board, even if he or she is a member of the board.

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

Our data suggests that insiders own less than 1% of Blue Bird Corporation in their own names. Because it’s a large company, even a small stake can cause alignment between the board and shareholders. In this case, insiders own US$8.8m worth of shares. It’s good to see board members own shares, but it might be worth checking to see if those insiders have been buying.

Public property

With a 10% stake, the general public, consisting mainly of individual investors, has some influence over Blue Bird. While this level of ownership may not be enough to sway a policy decision in their favor, they can still collectively influence company policy.

Next Steps:

It is always worth thinking about the different groups that own shares in a company. But to better understand Blue Bird, we need to consider many other factors. Note that Blue Bird 1 warning signal in our investment analysis you should know about…

But ultimately It is the futurenot the past, will determine how well the owners of this company will perform, so we think it wise to take a look at this free report showing whether analysts are predicting a better future.

NB: The figures in this article are calculated using the last twelve months’ data, which refer to the 12-month period ending on the last day of the month in which the financial statements are dated. This may not match the figures in the annual report.

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This Simply Wall St article is of a general nature. We comment solely on historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.