Market cap

Chico’s FAS, Inc. (NYSE:CHS) market cap drop of $71 million may not impact institutional owners as much after year of 7.1% returns

If you want to know who actually controls Chico’s FAS, Inc. (NYSE:CHS), then you’ll need to look at the composition of its share register. We can see that institutions hold the lion’s share of the business with 84% ownership. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.

Losing money on investments is something no shareholder likes, let alone institutional investors who saw the value of their holdings fall by 10% last week. However, the 7.1% one-year shareholder return might have softened the blow. They should, however, be aware of further losses in the future.

In the table below, we zoom in on the different ownership groups of Chico’s FAS.

See our latest analysis for Chico’s FAS

NYSE: Breakdown of CHS shareholding as of September 15, 2022

What does institutional ownership tell us about Chico’s SAF?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

As you can see, institutional investors hold a sizable share of Chico’s FAS. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Chico’s FAS historical revenue and earnings below, but keep in mind there’s always more to the story.

earnings-and-revenue-growth
NYSE: CHS Earnings and Revenue Growth September 15, 2022

Institutional investors own more than 50% of the company, so together they can probably heavily influence board decisions. Chico’s FAS does not belong to hedge funds. BlackRock, Inc. is currently the largest shareholder, with 16% of shares outstanding. With 6.7% and 4.7% of the shares outstanding, respectively, The Vanguard Group, Inc. and Marshall Wace LLP are the second and third largest shareholders. Additionally, the company’s CEO, Molly Langenstein, directly owns 1.1% of the total shares outstanding.

We dug a little deeper and found that 10 of the major shareholders make up about 50% of the register, implying that along with the large shareholders, there are a few smaller shareholders, thereby balancing everyone’s interests somewhat.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There is a little analyst coverage of the stock, but not much. So there is room for him to gain coverage.

FAS Insider Ownership of Chico

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.

Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.

Shareholders would likely be interested to learn that insiders hold stock in Chico’s FAS, Inc. In their own name, insiders hold $22 million worth of stock in the $620 million company. Some would say this shows the alignment of interests between shareholders and the board. But it might be worth checking to see if these insiders have sold.

General public property

With a 13% stake, the general public, consisting mostly of individual investors, has some influence over Chico’s FAS. While that size of ownership might not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.

Next steps:

While it is worth considering the different groups that own a business, there are other, even more important factors. For example, we have identified 2 warning signs of Chico’s FAS of which you should be aware.

But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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