In This Article:
Key Insights
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Given the large stake in the stock by institutions, Croda International's stock price might be vulnerable to their trading decisions
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A total of 17 investors have a majority stake in the company with 51% ownership
Every investor in Croda International Plc (LON:CRDA) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 88% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Last week's UK£240m market cap gain would probably be appreciated by institutional investors, especially after a year of 29% losses.
In the chart below, we zoom in on the different ownership groups of Croda International.
Check out our latest analysis for Croda International
What Does The Institutional Ownership Tell Us About Croda International?
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.
As you can see, institutional investors have a fair amount of stake in Croda International. 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. 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 Croda International's historic earnings and revenue below, but keep in mind there's always more to the story.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Croda International is not owned by hedge funds. BlackRock, Inc. is currently the largest shareholder, with 8.1% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.5% and 5.4% of the stock.
Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 17 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.