Institutional investors have a lot riding on Capitol Federal Financial, Inc. (NASDAQ:CFFN) with 78% ownership

Key Insights

• Given the large stake in the stock by institutions, Capitol Federal Financial's stock price might be vulnerable to their trading decisions
• A total of 8 investors have a majority stake in the company with 50% ownership
• Insiders have been buying lately

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Every investor in Capitol Federal Financial, Inc. (NASDAQ:CFFN) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 78% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And things are looking up for institutional investors after the company gained US$52m in market cap last week. One-year return to shareholders is currently 24% and last week’s gain was the icing on the cake.

Let's delve deeper into each type of owner of Capitol Federal Financial, beginning with the chart below.

See our latest analysis for Capitol Federal Financial

What Does The Institutional Ownership Tell Us About Capitol Federal Financial?

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.

Capitol Federal Financial already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Capitol Federal Financial's earnings history below. Of course, the future is what really matters.

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 Capitol Federal Financial. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 15% of shares outstanding. In comparison, the second and third largest shareholders hold about 10% and 5.3% of the stock. Additionally, the company's CEO John Dicus directly holds 2.1% of the total shares outstanding.

We also observed that the top 8 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 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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Capitol Federal Financial

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.

We can see that insiders own shares in Capitol Federal Financial, Inc.. It has a market capitalization of just US$808m, and insiders have US$27m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 13% stake in Capitol Federal Financial. 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.

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. For instance, we've identified 1 warning sign for Capitol Federal Financial that you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.