Key Insights

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

• The top 3 shareholders own 50% of the company

• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

Every investor in Ninety One Group (LON:N91) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 48% 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. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

In the chart below, we zoom in on the different ownership groups of Ninety One Group.

View our latest analysis for Ninety One Group

What Does The Institutional Ownership Tell Us About Ninety One Group?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Ninety One Group 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. 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 Ninety One Group's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Ninety One Group. Forty Two Point Two is currently the largest shareholder, with 29% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 10% of the stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.