With 84% ownership, The Travelers Companies, Inc. (NYSE:TRV) boasts of strong institutional backing
Simply Wall St · 01/29 10:54

Key Insights

  • Significantly high institutional ownership implies Travelers Companies' stock price is sensitive to their trading actions
  • 51% of the business is held by the top 17 shareholders
  • Insiders have sold recently

Every investor in The Travelers Companies, Inc. (NYSE:TRV) should be aware of the most powerful shareholder groups. With 84% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

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

See our latest analysis for Travelers Companies

ownership-breakdown
NYSE:TRV Ownership Breakdown January 29th 2024

What Does The Institutional Ownership Tell Us About Travelers Companies?

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.

Travelers Companies already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Travelers Companies, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NYSE:TRV Earnings and Revenue Growth January 29th 2024

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Travelers Companies is not owned by hedge funds. The Vanguard Group, Inc. is currently the company's largest shareholder with 9.4% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 9.0% of common stock, and State Street Global Advisors, Inc. holds about 6.7% of the company stock.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 17 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 Travelers Companies

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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.

Our data suggests that insiders own under 1% of The Travelers Companies, Inc. in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own US$176m of stock. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Travelers Companies. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Travelers Companies , and understanding them should be part of your investment process.

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.