Institutional investors are The Bank of New York Mellon Corporation's (NYSE:BK) biggest bettors and were rewarded after last week's US$1.8b market cap gain
Key Insights
Given the large stake in the stock by institutions, Bank of New York Mellon's stock price might be vulnerable to their trading decisions
The top 16 shareholders own 50% of the company
Every investor in The Bank of New York Mellon Corporation (NYSE:BK) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 89% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And things are looking up for institutional investors after the company gained US$1.8b in market cap last week. The one-year return on investment is currently 90% and last week's gain would have been more than welcomed.
In the chart below, we zoom in on the different ownership groups of Bank of New York Mellon.
Check out our latest analysis for Bank of New York Mellon
What Does The Institutional Ownership Tell Us About Bank of New York Mellon?
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.
As you can see, institutional investors have a fair amount of stake in Bank of New York Mellon. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Bank of New York Mellon's earnings history below. Of course, the future is what really matters.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Bank of New York Mellon is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 10.0% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.8% and 7.5% of the stock.
A closer look at our ownership figures suggests that the top 16 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Bank of New York Mellon
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own less than 1% of The Bank of New York Mellon Corporation. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own US$95m of stock. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Bank of New York Mellon. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Bank of New York Mellon .
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.