Madison Square Garden Sports Corp. (NYSE:MSGS) is a favorite among institutional investors, who own 63% – Simply Wall St

Key insights

• Institutions’ significant ownership of Madison Square Garden Sports suggests that they have significant influence over the company’s stock price
• A total of 16 investors have a majority stake in the company with 50% ownership
• Recent insider sales

Every investor in Madison Square Garden Sports Corp. (NYSE: MSGS ) should be aware of the most powerful shareholder groups. With a 63% stake, the institutions own the maximum shares in the company. This means that the group stands to gain the most if the stock goes up (or lose the most if it goes down).

Given the vast amount of money and research capacity at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. As a result, a significant amount of institutional money invested in a firm is generally seen as a positive attribute.

In the chart below, we zoom in on the different ownership groups of Madison Square Garden Sports.

Check out our latest Madison Square Garden Sports analysis

What does institutional ownership tell us about Madison Square Garden Sports?

Institutional investors typically compare their own returns to the returns of a commonly followed index. So they usually consider buying larger companies that are included in the relevant benchmark index.

Madison Square Garden Sports now has institutions on the stock registry. In fact, they own a respectable stake in the company. This may indicate that the company has some degree of confidence in the investment community. However, it is best to be careful about relying on the supposed validation that comes with institutional investors. They are also sometimes wrong. It is not unusual to see a large drop in the share price if two large institutional investors try to sell shares at the same time. So it’s worth checking out Madison Square Garden Sports’ past earnings trajectory (below). Of course, keep in mind that there are other factors to consider.

Investors should note that the institutions actually own more than half the company, so they can collectively wield significant power. Madison Square Garden Sports is not owned by hedge funds. The company’s largest shareholder is BlackRock, Inc., with ownership of 8.5%. The second and third largest shareholders are The Vanguard Group, Inc. and Silver Lake Technology Management, LLC, with an equal amount of shares in their name of 8.0%. In addition, the company’s CEO James Dolan directly holds 0.8% of the total shares outstanding.

Looking at the shareholder register, we can see that 50% of the ownership is controlled by the 16 largest shareholders, meaning that no single shareholder has a majority ownership stake.

While studying institutional ownership for a company can add value to your research, it’s also a good practice to examine analyst recommendations to gain a deeper understanding of the stock’s expected performance. Quite a few analysts cover the stock, so you can look at projected growth pretty easily.

Internally owned by Madison Square Garden Sports

The definition of an insider may vary slightly from country to country, but members of the board of directors are always counted. The company’s management runs the business, but the CEO will be accountable to the board even if he or she is a member.

Most believe that having inside information is positive because it can indicate that the board is well aligned with other shareholders. In some cases, however, too much power is concentrated in this group.

We can see that insiders own shares in Madison Square Garden Sports Corp. It’s a big company, so it’s good to see that level of alignment. Insiders own $65 million worth of stock (at current prices). Most would say this shows an alignment of interests between shareholders and the board. Still, it might be worth checking to see if these insiders have been selling.

Common public property

The general public – including retail investors – owns a 28% stake in the company and therefore cannot be easily ignored. This amount of ownership, while significant, may not be enough to change company policy if the decision is not in sync with other major shareholders.

Private equity ownership

Private equity firms own a 7.9% stake in Madison Square Garden Sports. This suggests that they can be influential in making key political decisions. Some investors may be encouraged by this, as private equity is sometimes able to promote strategies that help the market see the company’s value. Alternatively, these holders may exit the investment after taking it public.

Next steps:

While it’s worth looking at the different groups that own a company, there are other factors that are even more important. For this you need to learn about 2 warning signs we spotted with Madison Square Garden Sports (including 1 that shouldn’t be overlooked) .

But in the end this is the futurenot the past that will determine how well the owners of this business will do. That’s why 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 have been calculated using data from the last twelve months, which refers to the 12-month period ending on the last date of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts, using only an unbiased methodology, and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. We aim to provide you with long-term focused analysis driven by fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.