Cardinal Health, Inc. (NYSE:CAH) is favoured by institutional owners who hold 89% of the company

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Institutions' substantial holdings in Cardinal Health implies that they have significant influence over the company's share price
The top 20 shareholders own 51% of the company
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
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A look at the shareholders of Cardinal Health, Inc. (NYSE:CAH) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 89% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
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.
In the chart below, we zoom in on the different ownership groups of Cardinal Health.
See our latest analysis for Cardinal Health
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 indices.
As you can see, institutional investors have a fair amount of stake in Cardinal Health. 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 Cardinal Health, (below). Of course, keep in mind that there are other factors to consider, too.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Cardinal Health. Our data shows that BlackRock, Inc. is the largest shareholder with 13% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 13% of common stock, and State Street Global Advisors, Inc. holds about 5.5% of the company stock.
After doing some more digging, we found that the top 20 have the combined ownership of 51% 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.
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our data suggests that insiders own under 1% of Cardinal Health, Inc. in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own US$140m of stock. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Cardinal Health. 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.
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Cardinal Health .
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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