Following a 49% decline over last year, recent gains may please Qurate Retail, Inc. (NASDAQ:QRTE.A) institutional owners

Key Insights

• Given the large stake in the stock by institutions, Qurate Retail's stock price might be vulnerable to their trading decisions
• 51% of the business is held by the top 12 shareholders
• Insiders have been selling lately

To get a sense of who is truly in control of Qurate Retail, Inc. (NASDAQ:QRTE.A), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 50% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Institutional investors would appreciate the 17% increase in share price last week, given their one-year losses have totalled a disappointing 49%.

In the chart below, we zoom in on the different ownership groups of Qurate Retail.

See our latest analysis for Qurate Retail

What Does The Institutional Ownership Tell Us About Qurate Retail?

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.

Qurate Retail already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Qurate Retail's earnings history below. Of course, the future is what really matters.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. It looks like hedge funds own 7.5% of Qurate Retail shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Contrarius Investment Management Ltd. is currently the largest shareholder, with 8.9% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.7% and 7.5% of the stock.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 12 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Qurate Retail

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 information suggests that insiders maintain a significant holding in Qurate Retail, Inc.. Insiders have a US$21m stake in this US$209m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 32% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Qurate Retail. 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 Qurate Retail better, we need to consider many other factors. Take risks for example - Qurate Retail has 3 warning signs (and 2 which are concerning) we think 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.