Key Insights

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

• A total of 25 investors have a majority stake in the company with 46% ownership

• Insiders have sold recently

Every investor in Precision Drilling Corporation (TSE:PD) should be aware of the most powerful shareholder groups. With 56% stake, institutions possess the maximum shares in the company. 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. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

Let's take a closer look to see what the different types of shareholders can tell us about Precision Drilling.

Check out our latest analysis for Precision Drilling

What Does The Institutional Ownership Tell Us About Precision Drilling?

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.

Precision Drilling already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Precision Drilling, (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. Precision Drilling is not owned by hedge funds. Ninepoint Partners LP is currently the company's largest shareholder with 9.5% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.9% and 4.7% of the stock. Furthermore, CEO Kevin Neveu is the owner of 1.9% of the company's shares.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.