In This Article:
Key Insights
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Significantly high institutional ownership implies Cadence Design Systems' stock price is sensitive to their trading actions
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A total of 22 investors have a majority stake in the company with 51% ownership
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Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
If you want to know who really controls Cadence Design Systems, Inc. (NASDAQ:CDNS), then you'll have to look at the makeup of its share registry. With 87% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.
Let's take a closer look to see what the different types of shareholders can tell us about Cadence Design Systems.
View our latest analysis for Cadence Design Systems
What Does The Institutional Ownership Tell Us About Cadence Design Systems?
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.
Cadence Design Systems 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. 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 Cadence Design Systems' earnings history below. Of course, the future is what really matters.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Cadence Design Systems is not owned by hedge funds. Our data shows that BlackRock, Inc. is the largest shareholder with 11% of shares outstanding. For context, the second largest shareholder holds about 9.4% 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 51% 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.