Institutional owners may consider drastic measures as Zions Bancorporation, National Association's (NASDAQ:ZION) recent US$287m drop adds to long-term losses

Key Insights

• Given the large stake in the stock by institutions, Zions Bancorporation National Association's stock price might be vulnerable to their trading decisions
• The top 15 shareholders own 51% of the company
• Recent sales by insiders

Every investor in Zions Bancorporation, National Association (NASDAQ:ZION) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 81% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, institutional investors endured the highest losses last week after market cap fell by US$287m. The recent loss, which adds to a one-year loss of 14% for stockholders, may not sit well with this group of investors. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the decline continues, institutional investors may be pressured to sell Zions Bancorporation National Association which might hurt individual investors.

In the chart below, we zoom in on the different ownership groups of Zions Bancorporation National Association.

View our latest analysis for Zions Bancorporation National Association

What Does The Institutional Ownership Tell Us About Zions Bancorporation National Association?

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.

We can see that Zions Bancorporation National Association does have institutional investors; and they hold a good portion of the company's stock. 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 Zions Bancorporation National Association, (below). Of course, keep in mind that there are other factors to consider, too.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Zions Bancorporation National Association. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 13% of shares outstanding. With 7.1% and 6.4% of the shares outstanding respectively, State Street Global Advisors, Inc. and BlackRock, Inc. are the second and third largest shareholders. Furthermore, CEO Harris Simmons is the owner of 0.9% of the company's shares.

After doing some more digging, we found that the top 15 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Zions Bancorporation National Association

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

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can see that insiders own shares in Zions Bancorporation, National Association. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$100m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 17% stake in Zions Bancorporation National Association. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Zions Bancorporation National Association .

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.