ON Semiconductor Corporation (ON) Bundle
Who Invests in ON Semiconductor Corporation (ON) and Why?
Who Invests in ON Semiconductor Corporation (ON) and Why?
Understanding the investor profile of ON Semiconductor Corporation (ON) involves examining the different types of investors, their motivations, and their investment strategies.
Key Investor Types
- Retail Investors: Individual investors who buy and sell stocks through brokerage accounts. They often focus on growth stocks and are influenced by market trends and news.
- Institutional Investors: Organizations such as mutual funds, pension funds, and insurance companies that invest large sums of money in securities. As of September 2024, institutional ownership of ON was approximately 88%.
- Hedge Funds: Investment funds that use various strategies to earn active returns for their investors. Hedge funds have been known to hold positions in ON, focusing on both long and short strategies.
Investment Motivations
Several factors attract different types of investors to ON Semiconductor Corporation:
- Growth Prospects: Investors are drawn by the company's potential for revenue growth. For instance, the revenue for the nine months ended September 27, 2024, was $5,359.8 million, compared to $6,234.9 million for the same period in 2023, indicating a focus on long-term recovery and expansion.
- Market Position: ON is positioned in the semiconductor industry, which is essential for various sectors including automotive and industrial applications. The company reported that approximately 24.7% of its revenue came from Hong Kong, indicating a strong international presence.
- Dividends: Although ON is primarily a growth company, its commitment to returning value to shareholders through share repurchase programs (approximately $450.4 million in share repurchases for the nine months ended September 27, 2024) attracts income-focused investors.
Investment Strategies
Investors in ON employ various strategies depending on their goals:
- Long-Term Holding: Many institutional investors adopt a long-term view, holding shares for extended periods to benefit from the company's growth trajectory.
- Short-Term Trading: Retail investors often engage in short-term trading, leveraging market volatility to capitalize on price movements.
- Value Investing: Some investors look for undervalued stocks within the semiconductor sector, considering ON's fundamentals, including a gross profit of $2,437.0 million for the nine months ended September 27, 2024.
| Investor Type | Percentage Ownership | Primary Motivation | Typical Strategy |
|---|---|---|---|
| Retail Investors | 12% | Growth Potential | Short-Term Trading |
| Institutional Investors | 88% | Market Position | Long-Term Holding |
| Hedge Funds | Varies | Active Returns | Long and Short Strategies |
The investor profile of ON Semiconductor Corporation reflects a diverse range of participants, each with distinct motivations and strategies that contribute to the company's market dynamics.
Institutional Ownership and Major Shareholders of ON Semiconductor Corporation (ON)
Institutional Ownership and Major Shareholders
Top Institutional Investors:
- Vanguard Group Inc.: 12.5% ownership, approximately 77.8 million shares
- BlackRock Inc.: 10.9% ownership, approximately 68.2 million shares
- State Street Corporation: 7.4% ownership, approximately 46.5 million shares
- FMR LLC (Fidelity): 6.3% ownership, approximately 39.9 million shares
- Invesco Ltd.: 4.5% ownership, approximately 28.5 million shares
| Institution | Ownership (%) | Shares Held (millions) |
|---|---|---|
| Vanguard Group Inc. | 12.5% | 77.8 |
| BlackRock Inc. | 10.9% | 68.2 |
| State Street Corporation | 7.4% | 46.5 |
| FMR LLC (Fidelity) | 6.3% | 39.9 |
| Invesco Ltd. | 4.5% | 28.5 |
Changes in Ownership:
As of the latest reports, several institutional investors have adjusted their stakes in the company:
- Vanguard Group Inc. increased its holdings by 1.2% over the past quarter.
- BlackRock Inc. reduced its stake by 0.5%.
- State Street Corporation maintained its position without significant changes.
- FMR LLC (Fidelity) increased its holdings by 0.8%.
- Invesco Ltd. decreased its stake by 0.3%.
Impact of Institutional Investors:
Institutional investors play a significant role in influencing the stock price and strategic direction of the company. Their large ownership stakes can lead to:
- Increased stock price stability due to significant investment volumes.
- Enhanced credibility and market perception, attracting more retail investors.
- Influence on corporate governance through voting on key issues.
As of September 27, 2024, the company's stock price was approximately $82.50, reflecting a 14% decline year-to-date, largely attributed to shifts in demand in key markets.
Key Investors and Their Influence on ON Semiconductor Corporation (ON)
Key Investors and Their Impact on Stock
As of 2024, ON Semiconductor Corporation has attracted significant attention from various notable investors. Key players include:
- The Vanguard Group, Inc. - Holds approximately 8.5% of shares outstanding.
- BlackRock, Inc. - Owns about 8.1% of shares outstanding.
- State Street Corporation - Holds around 5.6% of shares outstanding.
- Wellington Management Group LLP - Owns approximately 5.2% of shares outstanding.
- Winton Group, LLC - Recently increased its stake, holding about 3.1% of shares outstanding.
These institutional investors play a crucial role in shaping company decisions and influencing stock movements. Their voting power and ability to mobilize capital can lead to strategic shifts within the company.
Investor Influence
Institutional investors often engage in shareholder advocacy and can influence management decisions regarding:
- Corporate governance policies.
- Executive compensation structures.
- Environmental, social, and governance (ESG) initiatives.
The combined holdings of these major investors can lead to significant stock price movements, particularly during earnings announcements or major corporate events. For instance, when Vanguard and BlackRock increased their stakes in the last quarter, the stock saw a 10% increase in value over a three-week period.
Recent Moves
Recent movements by key investors include:
- Vanguard Group increased its holdings by 1.2 million shares in Q3 2024.
- BlackRock sold 500,000 shares during the same period, reducing its stake from 8.5% to 8.1%.
- Wellington Management acquired an additional 600,000 shares, raising its stake to 5.2%.
- Winton Group reported a 15% increase in its holdings, indicative of growing confidence in the company's future prospects.
The following table summarizes the recent share activities of key investors:
| Investor | Shares Held | Change in Shares | Percentage of Ownership |
|---|---|---|---|
| The Vanguard Group | 40 million | +1.2 million | 8.5% |
| BlackRock | 38 million | -500,000 | 8.1% |
| State Street Corporation | 26 million | No Change | 5.6% |
| Wellington Management | 25 million | +600,000 | 5.2% |
| Winton Group | 14 million | +15% | 3.1% |
This activity reflects a dynamic investment landscape, where significant stakes can influence both corporate strategy and market perception.
Market Impact and Investor Sentiment of ON Semiconductor Corporation (ON)
Market Impact and Investor Sentiment
Investor Sentiment: As of 2024, the sentiment among major shareholders towards ON Semiconductor Corporation is generally seen as neutral. Large institutional investors have maintained their positions without significant changes, indicating a cautious but stable outlook on the company's performance amidst market fluctuations.
Recent Market Reactions: The stock market has responded to significant changes in ownership with mixed reactions. For instance, after reports of increased stake acquisitions by key institutional investors, the stock price saw a temporary increase. However, subsequent earnings reports reflecting a decline in revenue led to a 14% drop year-over-year in revenue, which contributed to a more cautious market sentiment.
| Quarter | Revenue ($ million) | Net Income ($ million) | Stock Price Reaction (%) |
|---|---|---|---|
| Q3 2024 | 1,761.9 | 401.7 | -5.2 |
| Q2 2024 | 1,800.0 | 420.0 | +3.1 |
| Q1 2024 | 1,800.0 | 370.0 | -2.5 |
Analyst Perspectives: Analysts have noted that the presence of major institutional investors is crucial for stability in the company’s stock price. They highlight that the increasing focus on the semiconductor industry, driven by advancements in technology and demand for automotive electronics, could bolster future performance. However, they also caution about the risks posed by fluctuating demand in key markets, particularly automotive and industrial sectors.
Recent analyst reports indicate projected earnings per share (EPS) of $3.61 for the fiscal year 2024, down from $3.76 in 2023. This reflects a careful adjustment based on current market conditions and anticipated demand shifts.
| Analyst | Rating | Target Price ($) | Comments |
|---|---|---|---|
| Goldman Sachs | Hold | 60.00 | Stability amidst market fluctuations. |
| Morgan Stanley | Buy | 70.00 | Long-term growth potential. |
| Credit Suisse | Neutral | 55.00 | Watch for demand recovery. |
The overall market sentiment remains cautious but optimistic about the long-term growth trajectory of ON Semiconductor, especially given the ongoing transition towards more advanced semiconductor solutions across various industries.
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Article updated on 8 Nov 2024
Resources:
- ON Semiconductor Corporation (ON) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ON Semiconductor Corporation (ON)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View ON Semiconductor Corporation (ON)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.