CarParts.com, Inc.’s (NASDAQ:PRTS) latest 10% decline adds to one-year losses, institutional investors may consider drastic measures – Simply Wall St
A look at the shareholders of CarParts.com, Inc. (NASDAQ:PRTS) can tell us which group is most powerful. With 65% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As a result, institutional investors endured the highest losses last week after market cap fell by US$51m. The recent loss, which adds to a one-year loss of 50% for stockholders, may not sit well with this group of investors. Often called “market makers”, institutions wield significant power in influencing the price dynamics of any stock. Hence, if weakness in CarParts.com’s share price continues, institutional investors may feel compelled to sell the stock, which might not be ideal for individual investors.
Let’s take a closer look to see what the different types of shareholders can tell us about CarParts.com.
See our latest analysis for CarParts.com
NasdaqGS:PRTS Ownership Breakdown August 20th 2022
What Does The Institutional Ownership Tell Us About CarParts.com?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
CarParts.com 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of CarParts.com, (below). Of course, keep in mind that there are other factors to consider, too.
NasdaqGS:PRTS Earnings and Revenue Growth August 20th 2022
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Our data indicates that hedge funds own 15% of CarParts.com. That’s interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Park West Asset Management LLC is currently the largest shareholder, with 9.7% of shares outstanding. With 5.9% and 5.7% of the shares outstanding respectively, BlackRock, Inc. and Cannell Capital LLC are the second and third largest shareholders. In addition, we found that David Meniane, the CEO has 2.2% of the shares allocated to their name.
After doing some more digging, we found that the top 12 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.
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 CarParts.com
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Most consider insider ownership a positive …….