key insights
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Significantly high institutional ownership means Oracle's stock price is sensitive to institutional trading actions
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A total of three investors hold a majority stake in the company, with an ownership interest of 52%.
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Insiders own 42% of Oracle
A look at the shareholders of Oracle Corporation (NYSE:ORCL) can tell us which group is the most powerful. We note that institutional investors control the majority of the company's shares, with their ownership accounting for 44%. That is, if the stock price rises, the group will gain the most (or if the stock price falls, it will suffer the maximum loss).
Institutional investors suffered the biggest losses as the company's market capitalization fell by $17 billion last week. However, his one-year return of 22% may have helped reduce the overall loss. But we guess they will pay attention to nerfs in the future.
Let's take a closer look to see what the different types of shareholders can tell us about Oracle.
Check out our latest analysis for Oracle.
What does institutional ownership tell us about Oracle?
Institutions typically measure a stock against a benchmark when reporting to their own investors, so enthusiasm for a stock often increases once it's included in a major index. We would expect most companies to have some institutions on their register, especially if they are growing.
We can see that Oracle has institutional investors. And they own a significant portion of the company's stock. This suggests some credibility among professional investors. But we can't rely on that fact alone because institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. If such a trade goes wrong, multiple parties may compete to sell stock quickly. This risk is higher for companies without a history of growth. You can see Oracle's historic earnings and revenue below, but keep in mind there's always more to the story.
Note that hedge funds don't have a meaningful investment in Oracle. Our data shows that Lawrence Ellison, who is also the company's top executive, holds the most shares at 42%. Investors consider it a positive sign when insiders own a significant amount of shares in a company. This is because it suggests insiders are tying their wealth to the future of the company. Meanwhile, the second and third largest shareholders hold 5.4% and 4.5% of the shares outstanding, respectively.
Upon further investigation, we found that the top 3 shareholders together control more than half of the company's shares, suggesting that they have significant power to influence the company's decisions.
Researching institutional ownership is a good way to assess and filter a stock's expected performance. The same can be done by studying analyst sentiment. There are plenty of analysts covering the stock, so it might be worth seeing what they are predicting.
Oracle Insider Ownership
The definition of a company insider can be subjective and varies by jurisdiction. Our data reflects individual insiders, and at least captures board members. Management ultimately answers to the board. However, it is not uncommon for managers to be members of the board of directors. This is especially true if the manager is the founder or CEO.
Most consider insider ownership a positive, because it can indicate the board is well aligned with other shareholders. However, in some cases, too much power may be concentrated within this group.
Our information suggests that insiders own a significant stake in Oracle Corporation. The company has a market capitalization of just US$316b, but insiders have US$132b worth of shares in their own names. That's very important. Most people would be happy to see the board investing alongside them. You may want to access this free chart of recent insider transactions.
Open to the public
The general public, including retail investors, owns 14% of the company, so they can't be easily ignored. While this group doesn't necessarily call the shots, it can certainly have a big influence on how the company is run.
Next steps:
I think it would be very interesting to find out who owns the company. But to really gain insight, you need to consider other information as well. Notice what Oracle is displaying. 1 warning sign in investment analysis you should know…
If you want to know what analysts are predicting in terms of future growth, don't miss this free Report on analyst forecasts.
Note: The numbers in this article are calculated using data from the previous 12 months and refer to the 12-month period ending on the last day of the month in which the financial statements are dated. This may not match the 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 using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
