In This Article:
Key Insights
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Significantly high institutional ownership implies Cerence's stock price is sensitive to their trading actions
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The top 13 shareholders own 51% of the company
Every investor in Cerence Inc. (NASDAQ:CRNC) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 84% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).
After a year of 78% losses, last week’s 10% gain would be welcomed by institutional investors as a possible sign that returns might start trending higher.
Let's take a closer look to see what the different types of shareholders can tell us about Cerence.
Check out our latest analysis for Cerence
What Does The Institutional Ownership Tell Us About Cerence?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Cerence 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 Cerence's 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. Cerence is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is American Capital Management, Inc. with 9.3% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 7.9% of common stock, and The Vanguard Group, Inc. holds about 7.4% of the company stock.
A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.