With an 88% stake in Cushman & Wakefield plc (NYSE:CWK), institutional investors have a lot of influence over the business.

Key information

• Significantly high institutional ownership means that Cushman & Wakefield’s share price is sensitive to their trading actions

• 52% of the business is owned by the top 11 shareholders

• Analyst forecasts along with proprietary data serve to provide a strong sense of a business’s prospects

Every investor in Cushman & Wakefield plc (NYSE:CWK) should be aware of the most powerful shareholder groups. With 88% of the stake, the institutions hold the highest stakes in the company. That is, the group will benefit the most if the stock rises (or lose the most if there is a decline).

And things are looking up for institutional investors after the company gained $94 million in market capitalization last week. The one-year ROI is currently 40%, and last week’s gain would have been more than welcome.

In the chart below, we zoom in on Cushman & Wakefield’s various property groups.

Check out our latest analysis for Cushman & Wakefield

What does institutional ownership tell us about Cushman & Wakefield?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indexes.

As you can see, institutional investors own quite a large stake in Cushman & Wakefield. This suggests some credibility among professional investors. But we can’t rely on that fact alone, because institutions make bad investments sometimes, just like everyone else. It is not unusual to see a large drop in the share price if two large institutional investors try to sell a stock at the same time. So it’s worth checking Cushman & Wakefield’s past earnings trajectory, (below). Of course, keep in mind that there are other factors to consider.

Since institutional investors own more than half of the shares issued, the board will likely have to pay attention to their preferences. Hedge funds don’t have much of a stake in Cushman & Wakefield. Vanguard Group, Inc. is currently the largest shareholder, with 13% of outstanding shares. In comparison, the second and third largest shareholders own approximately 9.7% and 4.7% of the shares.

The story continues

A closer look at our ownership figures suggests that the top 11 shareholders have a combined ownership of 52%, meaning that no single shareholder has a majority.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiment to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth checking out what they’re forecasting as well.

Inside property of Cushman & Wakefield

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company is accountable to the board, and the latter should represent the interests of the shareholders. In particular, sometimes senior managers are themselves on the board.

Overall, I think insider ownership is a good thing. However, on some occasions, it is more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders hold some shares of Cushman & Wakefield plc. It’s a pretty big company, so it’s generally positive to see a potentially significant alignment. In this case, I own about $33 million worth of stock (at current prices). Most would say this shows the alignment of interests between shareholders and the board. Still, it might be worth checking if these insiders have sold.

General public property

The general public, including retail investors, owns 11% of the shares in the company and thus cannot be easily ignored. This size of ownership, although considerable, may not be enough to change company policy if the decision is not synchronized with other large shareholders.

Next steps:

While it’s worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Cushman & Wakefield is displayed 3 warning signs in our investment analysis and 1 of these is potentially serious…

If you’re like me, you might want to consider whether this company will grow or shrink. Fortunately, you can check out this free report that shows analysts’ predictions for its future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statement is dated. May not be consistent with full year annual report figures.

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This article from Simply Wall St is general in nature. We only provide commentary based on historical data and analyst forecasts using an unbiased methodology, and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. We aim to provide you with focused long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or quality materials. Simply Wall St has no position in any of the stocks mentioned.

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