Key Insights

• Given the large stake in the stock by institutions, Norcros' stock price might be vulnerable to their trading decisions

• A total of 7 investors have a majority stake in the company with 52% ownership

• Insiders have bought recently

Every investor in Norcros plc (LON:NXR) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 80% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

In the chart below, we zoom in on the different ownership groups of Norcros.

Check out our latest analysis for Norcros

What Does The Institutional Ownership Tell Us About Norcros?

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 Norcros does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Norcros, (below). Of course, keep in mind that there are other factors to consider, too.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Norcros. Our data shows that Fidelity International Ltd is the largest shareholder with 10% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 9.8%, of the shares outstanding, respectively.

We also observed that the top 7 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.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.