Key Insights

• Given the large stake in the stock by institutions, Intuit's stock price might be vulnerable to their trading decisions

• A total of 22 investors have a majority stake in the company with 50% ownership

• Recent sales by insiders

A look at the shareholders of Intuit Inc. (NASDAQ:INTU) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 86% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 5.0% last week. Still, the 20% one-year gains may have helped mitigate their overall losses. We would assume however, that they would be on the lookout for weakness in the future.

In the chart below, we zoom in on the different ownership groups of Intuit.

See our latest analysis for Intuit

What Does The Institutional Ownership Tell Us About Intuit?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Intuit does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Intuit's historic earnings and revenue below, but keep in mind there's always more to the story.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Intuit. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 9.4%. For context, the second largest shareholder holds about 8.7% of the shares outstanding, followed by an ownership of 4.3% by the third-largest shareholder.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 22 shareholders, meaning that no single shareholder has a majority interest in the ownership.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.