In This Article:
Key Insights
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Given the large stake in the stock by institutions, Berkshire Hathaway's stock price might be vulnerable to their trading decisions
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The top 14 shareholders own 50% of the company
To get a sense of who is truly in control of Berkshire Hathaway Inc. (NYSE:BRK.A), it is important to understand the ownership structure of the business. With 62% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal 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 delve deeper into each type of owner of Berkshire Hathaway, beginning with the chart below.
View our latest analysis for Berkshire Hathaway
What Does The Institutional Ownership Tell Us About Berkshire Hathaway?
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.
Berkshire Hathaway 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. 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 Berkshire Hathaway's earnings history below. Of course, the future is what really matters.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Berkshire Hathaway is not owned by hedge funds. With a 14% stake, CEO Warren Buffett is the largest shareholder. The Vanguard Group, Inc. is the second largest shareholder owning 7.1% of common stock, and Motley Fool Asset Management, LLC holds about 6.9% of the company stock.
After doing some more digging, we found that the top 14 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.