After losing 22% in the past year, CVS Health Corporation (NYSE:CVS) institutional owners must be relieved by the recent gain

In This Article:

Key Insights

  • Significantly high institutional ownership implies CVS Health's stock price is sensitive to their trading actions

  • A total of 20 investors have a majority stake in the company with 50% ownership

  • Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in CVS Health Corporation (NYSE:CVS) should be aware of the most powerful shareholder groups. With 82% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutional investors would probably welcome last week's 3.7% increase in the share price after a year of 22% losses as a sign that returns may to begin trending higher.

Let's take a closer look to see what the different types of shareholders can tell us about CVS Health.

See our latest analysis for CVS Health

ownership-breakdown
NYSE:CVS Ownership Breakdown January 26th 2025

What Does The Institutional Ownership Tell Us About CVS Health?

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.

We can see that CVS Health does have institutional investors; and they hold a good portion of the company's stock. 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. 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 CVS Health's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NYSE:CVS Earnings and Revenue Growth January 26th 2025

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in CVS Health. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 9.3% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.3% and 6.3% of the stock.

After doing some more digging, we found that the top 20 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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.