There have been some major buyers and sellers of analyst firms’ stock in recent months. Mainly investors selling are simply cashing in their gains (At Jupiter, however, they are simply cashing in). The chart opposite shows Forrester’s stock up substantially, Gartner’s has risen massively while Jupiter’s price has halved.
At both Gartner and Forrester, five of the 12 largest institutions holders have reduced their holdings. However, there are some interesting differences between those firms.
Gartner’s stock has risen and risen over recent months. The price has crossed $20, giving the firm a capitalisation of over $2,250 million. Some investors cannot get enough of Gartner: in September, both Blackrock Advisors and Freiss Associates said they had bought over 900,000 shares. Turner Investments and Criterion Capital Management bought 500,000 or more shares each. Freiss and Turner are new investors in the firm.
However, there are more firms selling Gartner than buying it. Over 100 of the firm’s major shareholders have sold stocks recently, mostly benefiting from recent gains in the firm’s stock price. In December, Silver Lake Partners reported that it had sold over 10 million shares in the firm. That month also saw two firm that both held around three-quarters of a million Gartner shares register that they had cashed them all in: Findlay Park Partners and Apex Capital. Last quarter also saw two other large shareholders announce that they had reduced their holdings by over 760,000 and 600,000 shares respectively: Karsch Capital Management and Rice, Hall, James and Associates.
To put all of this in context, let’s compare it with Forrester. Over the last half year, Forrester has had twice as many companies buying new positions in the firm as there have been firms cashing out. With a share price around $27, Forrester’s market capitalisation is around a quarter of Gartner’s, even though Forrester’s $150m revenue is less than a sixth that of billion-dollar Gartner. Put another way, Forrester is worth four times its revenue, while Gartner is worth 2.5 times its revenue
The largest purchasers of Forrester stock in recent months have all added on around 200,000 shares: Trusco, Russell, Mason Street and Oppenheimer. Three of those four are new investors in Forrester. Around 135,000 shares were purchased by both Charles Schwab and Friess Associates (the only major recent buyer of both Gartner and Forrester). BlackRock is one of only five major sellers (over 100,000) of Forrester: the others are Fidelity, Weatherbie, Hartland and Royce. However, Royce and BlackRock remain of the Forrester largest Mutual Fund holders.
Perhaps the largest difference is concentration. Forrester’s ownership is the more widespread: Gartner’s top 10 investors own 55% of the company; Forrester’s ten largest own 27%. Gartner’s largest shareholder is now ValueAct, which also owns large slices of Reuters plc, Avaya Inc, Acxiom Corp and Misys plc. ValueAct owns over 18% of Gartner, while Forrester’ largest shareholder, BlackRock, owns less than 4% of Forrester.
P.S. So, what’s the bottom line? The read about the significance of these changes, read this.