With 87% ownership, Ameriprise Financial, Inc. (NYSE:AMP) boasts of strong institutional backing

Key Insights

• Given the large stake in the stock by institutions, Ameriprise Financial's stock price might be vulnerable to their trading decisions
• 51% of the business is held by the top 17 shareholders
• Recent sales by insiders

A look at the shareholders of Ameriprise Financial, Inc. (NYSE:AMP) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 87% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

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.

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

See our latest analysis for Ameriprise Financial

What Does The Institutional Ownership Tell Us About Ameriprise Financial?

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.

As you can see, institutional investors have a fair amount of stake in Ameriprise Financial. 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 Ameriprise Financial's historic earnings and revenue below, but keep in mind there's always more to the story.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Ameriprise Financial is not owned by hedge funds. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 13%. For context, the second largest shareholder holds about 8.9% of the shares outstanding, followed by an ownership of 4.6% by the third-largest shareholder.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 17 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. 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 Ameriprise Financial

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Ameriprise Financial, 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$133m of stock. 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, who are usually individual investors, hold a 13% stake in Ameriprise 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Ameriprise Financial better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Ameriprise Financial you should know about.

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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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.