UnitedHealth Group Incorporated's (NYSE:UNH) high institutional ownership speaks for itself as stock continues to impress, up 3.7% over last week
In This Article:
Key Insights
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Institutions' substantial holdings in UnitedHealth Group implies that they have significant influence over the company's share price
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50% of the business is held by the top 18 shareholders
A look at the shareholders of UnitedHealth Group Incorporated (NYSE:UNH) can tell us which group is most powerful. The group holding the most number of shares in the company, around 90% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).
And last week, institutional investors ended up benefitting the most after the company hit US$552b in market cap. One-year return to shareholders is currently 14% and last week’s gain was the icing on the cake.
Let's take a closer look to see what the different types of shareholders can tell us about UnitedHealth Group.
See our latest analysis for UnitedHealth Group
What Does The Institutional Ownership Tell Us About UnitedHealth Group?
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.
UnitedHealth Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 UnitedHealth Group, (below). Of course, keep in mind that there are other factors to consider, too.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. UnitedHealth Group is not owned by hedge funds. The Vanguard Group, Inc. is currently the company's largest shareholder with 9.1% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.0% and 6.4% of the stock.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 18 shareholders, meaning that no single shareholder has a majority interest in the ownership.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.