2 weeks Ago By Simply Wall St.
Key Insights Given the large stake in the stock by institutions, Mastercard's stock price might be vulnerable to their trading decisions A total of 18 investors have a majority stake in the company with 51% ownership Using data from alongside ownership research, one can better assess the future performance of a company Every investor in Mastercard Incorporated ( ) should be aware of the most powerful shareholder groups. With 89% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute. Let's take a closer look to see what the different types of shareholders can tell us about Mastercard.
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. As you can see, institutional investors have a fair amount of stake in Mastercard.
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. 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 Mastercard'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.
Mastercard is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is The MasterCard Foundation, Endowment Arm with 9.9% of shares outstanding.
For context, the second largest shareholder holds about 8.3% of the shares outstanding, followed by an ownership of 7.6% by the third-largest shareholder.
Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 18 shareholders, meaning that no single shareholder has a majority interest in the ownership. While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board.
However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO. I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our data suggests that insiders own under 1% of Mastercard Incorporated in their own names. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own US$188m worth of shares (at current prices).
In this sort of situation, it can be more interesting to With a 11% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Mastercard. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders. It's always worth thinking about the different groups who own shares in a company.
But to understand Mastercard better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. , and understanding them should be part of your investment process.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check ..
