Key Insights

• Significantly high institutional ownership implies Open Text's stock price is sensitive to their trading actions

• 51% of the business is held by the top 25 shareholders

• Insiders have been selling lately

A look at the shareholders of Open Text Corporation (NASDAQ:OTEX) can tell us which group is most powerful. The group holding the most number of shares in the company, around 76% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

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 take a closer look to see what the different types of shareholders can tell us about Open Text.

View our latest analysis for Open Text

What Does The Institutional Ownership Tell Us About Open Text?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Open Text does have institutional investors; and they hold a good portion of the company's stock. 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 Open Text'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. Open Text is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Jarislowsky, Fraser Limited with 5.8% of shares outstanding. With 4.2% and 3.8% of the shares outstanding respectively, Harris Associates L.P. and The Vanguard Group, Inc. are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 25 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.