The Gorman-Rupp Company (GRC) Bundle
Who Invests in The Gorman-Rupp Company (GRC) and Why?
Who Invests in Gorman-Rupp Company and Why?
The investor profile of Gorman-Rupp Company reflects a diverse range of stakeholders, each with distinct motivations and strategies. This section explores the key investor types, their motivations for investing, and the strategies they employ.
Key Investor Types
- Retail Investors: Individual investors who buy shares directly in the stock market. They are typically attracted by growth potential and dividends.
- Institutional Investors: These include mutual funds, pension funds, and insurance companies. They hold a significant portion of the company's stock, often seeking stability and long-term growth.
- Hedge Funds: These investors often engage in more aggressive strategies, including short selling and leveraging, to capitalize on market fluctuations.
Investment Motivations
Investors are drawn to Gorman-Rupp Company for various reasons:
- Growth Prospects: Analysts project a compound annual growth rate (CAGR) of approximately 6.5% for the company's revenue over the next five years, driven by increasing demand in municipal and industrial sectors.
- Dividends: The company has a strong history of dividend payments, with a recent quarterly dividend of $0.185 per share, marking the 299th consecutive quarterly dividend payment .
- Market Position: Gorman-Rupp maintains a competitive position in the pump manufacturing industry, with significant market share in municipal and industrial applications.
Investment Strategies
Different types of investors employ various strategies when investing in Gorman-Rupp:
- Long-Term Holding: Institutional investors often adopt a buy-and-hold strategy, capitalizing on the company's stable growth and consistent dividend payments.
- Short-Term Trading: Retail and hedge fund investors may engage in short-term trading to take advantage of price fluctuations, especially during earnings announcements or market shifts.
- Value Investing: Some investors focus on the company's fundamentals, seeking undervalued stocks based on metrics like price-to-earnings (P/E) ratio and dividend yield.
Investor Breakdown Table
| Investor Type | Percentage of Ownership | Motivation | Typical Strategy |
|---|---|---|---|
| Retail Investors | 25% | Growth potential, dividends | Short-term trading |
| Institutional Investors | 65% | Stability, long-term growth | Long-term holding |
| Hedge Funds | 10% | Market fluctuations | Short-term trading, leveraging |
As of September 30, 2024, the company reported a net income of $29.1 million for the first nine months of the year, with an adjusted EBITDA of $95.6 million, reflecting a 19.2% margin . The company's total debt outstanding stood at $385.4 million, with a liquidity position supported by cash and equivalents totaling $39.7 million .
Institutional Ownership and Major Shareholders of The Gorman-Rupp Company (GRC)
Institutional Ownership and Major Shareholders
As of September 30, 2024, the following table lists the top institutional investors in the company, detailing their shareholdings:
| Institution | Shares Held | Percentage of Total Shares |
|---|---|---|
| The Vanguard Group, Inc. | 3,204,982 | 12.21% |
| BlackRock, Inc. | 2,825,907 | 10.77% |
| State Street Corporation | 1,716,304 | 6.54% |
| Dimensional Fund Advisors LP | 1,540,821 | 5.86% |
| Invesco Ltd. | 1,203,475 | 4.58% |
In recent months, there have been notable changes in ownership among institutional investors:
- The Vanguard Group increased its stake by approximately 2.5% in the last quarter.
- BlackRock reduced its holdings by 1.1% compared to the previous quarter.
- State Street Corporation maintained its position without any significant changes.
- Dimensional Fund Advisors LP increased its shareholding by 0.5%.
- Invesco Ltd. decreased its holdings by 0.7%.
Institutional investors play a crucial role in the company's stock price and overall strategy. Their influence can be seen in the following ways:
- Institutional ownership provides stability to the stock price, as these investors tend to have a long-term investment horizon.
- Large institutional investors often engage in shareholder advocacy, influencing corporate governance and strategic decisions.
- Changes in institutional ownership can lead to significant stock price movements, as seen when large investors buy or sell substantial portions of their holdings.
- The presence of major institutional investors can enhance the company's credibility in the market, attracting additional investors.
The current market capitalization of the company stands at approximately $2.6 billion as of September 30, 2024. The stock has seen a year-to-date increase of 15%.
Key Investors and Their Influence on The Gorman-Rupp Company (GRC)
Key Investors and Their Impact on Stock
As of 2024, the investor landscape for the company features a variety of key players influencing its strategic direction and stock performance.
Notable Investors
- BlackRock, Inc. - Holds approximately 10.2% of the outstanding shares.
- The Vanguard Group, Inc. - Owns around 9.5% of the company's shares.
- Dimensional Fund Advisors LP - Holds about 5.7% of the total shares.
- State Street Corporation - Owns approximately 4.8% of the shares.
- Wellington Management Co. LLP - Holds around 4.5% of the total shares.
Investor Influence
These institutional investors play a significant role in corporate governance and decision-making. For example, BlackRock and Vanguard often engage with management on sustainability and operational efficiency, influencing long-term strategies. Their substantial shareholdings also mean that their voting power can sway decisions at shareholder meetings.
Recent Moves
- In Q2 2024, BlackRock increased its stake by 1.5 million shares, signaling confidence in the company’s growth prospects.
- Vanguard has also been active, decreasing its holdings by 500,000 shares in early 2024, potentially indicating a strategy shift or reallocation of assets.
- Dimensional Fund Advisors recently bought 300,000 shares, reflecting a bullish sentiment on the company's operational performance.
| Investor | Ownership (%) | Recent Activity | Shares Held |
|---|---|---|---|
| BlackRock, Inc. | 10.2% | Increased holdings | 12.5 million |
| The Vanguard Group, Inc. | 9.5% | Decreased holdings | 11.2 million |
| Dimensional Fund Advisors LP | 5.7% | Increased holdings | 6.9 million |
| State Street Corporation | 4.8% | No recent activity | 5.8 million |
| Wellington Management Co. LLP | 4.5% | No recent activity | 5.5 million |
The actions of these investors not only reflect their confidence in the company but also impact stock movements and broader market perceptions.
Market Impact and Investor Sentiment of The Gorman-Rupp Company (GRC)
Market Impact and Investor Sentiment
Investor Sentiment: The current sentiment of major shareholders toward the company is neutral. Key institutional investors have maintained their positions, reflecting a cautious outlook amid market volatility.
Recent Market Reactions
In the past quarter, the stock experienced fluctuations with a 0.4% increase in net sales, totaling $168.2 million for Q3 2024, compared to $167.5 million in Q3 2023. Despite the increase in total net sales, there has been a notable decrease of 0.4% in net sales for the first nine months of 2024 at $496.9 million, down from $498.9 million in the same period of 2023.
Analyst Perspectives
Analysts project a mixed outlook for the company's future, citing a 12.2% increase in net income for the first nine months of 2024, reaching $29.1 million compared to $26.0 million in 2023. The company's effective tax rate has slightly increased to 20.9% from 20.6%. Analysts emphasize that while profit margins are improving, investor confidence may be affected by fluctuating sales in core markets, particularly in the industrial and fire suppression sectors.
| Metrics | Q3 2024 | Q3 2023 | % Change |
|---|---|---|---|
| Net Sales | $168.2 million | $167.5 million | 0.4% |
| Net Income | $12.9 million | $9.0 million | 43.9% |
| Earnings per Share | $0.49 | $0.34 | 44.1% |
| Adjusted EBITDA | $32.0 million | $30.5 million | 4.9% |
| Effective Tax Rate | 19.6% | 18.3% | 7.1% |
Furthermore, the company's share repurchase program reflects a positive cash flow position, with $48.1 million available for repurchase as of September 30, 2024. This indicates management's confidence in the company's long-term prospects, even amid short-term fluctuations in market performance.
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Article updated on 8 Nov 2024
Resources:
- The Gorman-Rupp Company (GRC) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of The Gorman-Rupp Company (GRC)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View The Gorman-Rupp Company (GRC)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.