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The big shareholder groups in Silicom Ltd. (NASDAQ:SILC) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Silicom is not a large company by global standards. It has a market capitalization of US$278m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions own shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about Silicom.

Check out our latest analysis for Silicom

What Does The Institutional Ownership Tell Us About Silicom?

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.

Silicom 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 Silicom's earnings history, below. Of course, the future is what really matters.

Our data indicates that hedge funds own 8.1% of Silicom. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Wellington Management Group LLP is currently the largest shareholder, with 13% of shares outstanding. With 9.4% and 8.1% of the shares outstanding respectively, Zohar Zisapel and Ibex Investors LLC are the second and third largest shareholders.

We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.