Key Insights

• Institutions' substantial holdings in Persimmon implies that they have significant influence over the company's share price

• A total of 19 investors have a majority stake in the company with 50% ownership

• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Persimmon Plc (LON:PSN) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 81% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

Let's take a closer look to see what the different types of shareholders can tell us about Persimmon.

View our latest analysis for Persimmon

What Does The Institutional Ownership Tell Us About Persimmon?

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

Persimmon already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Persimmon, (below). Of course, keep in mind that there are other factors to consider, too.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Persimmon is not owned by hedge funds. Our data shows that BlackRock, Inc. is the largest shareholder with 8.5% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.9% and 4.4% of the stock.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 19 shareholders, meaning that no single shareholder has a majority interest in the ownership.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.