Positive week for Eversource Energy (NYSE:ES) institutional investors who lost 6.2% over the past year

·4-min read

Key Insights

  • Institutions' substantial holdings in Eversource Energy implies that they have significant influence over the company's share price

  • 51% of the business is held by the top 18 shareholders

  • Insiders have been selling lately

A look at the shareholders of Eversource Energy (NYSE:ES) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 81% ownership. 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 4.2% increase in share prices after a year of 6.2% losses as a sign that returns are likely to begin trending higher.

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

View our latest analysis for Eversource Energy

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Eversource Energy?

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.

Eversource Energy already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Eversource Energy, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
earnings-and-revenue-growth

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Eversource Energy. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 13%. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 7.3% 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.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Eversource Energy

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 Eversource Energy in their own names. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own US$57m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 19% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

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. Be aware that Eversource Energy is showing 3 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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

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