The recent drop in prices must have disappointed GE Vernova Inc. (NYSE:GEV) institutional investors who own 79% of the shares

Key Insights

• Significantly high institutional ownership implies GE Vernova's stock price is sensitive to their trading actions
• 50% of the business is held by the top 19 shareholders
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in GE Vernova Inc. (NYSE:GEV) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 79% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to US$80b last week, institutional would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of GE Vernova, beginning with the chart below.

See our latest analysis for GE Vernova

What Does The Institutional Ownership Tell Us About GE Vernova?

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.

GE Vernova 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see GE Vernova's historic earnings and revenue below, but keep in mind there's always more to the story.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. GE Vernova is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 8.7% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.1% and 6.8% of the stock.

A closer look at our ownership figures suggests that the top 19 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of GE Vernova

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our data suggests that insiders own under 1% of GE Vernova Inc. 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$36m 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

With a 21% ownership, the general public, mostly comprising of individual investors, have some degree of sway over GE Vernova. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand GE Vernova better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for GE Vernova you should be aware of.

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.