Key Insights

• Given the large stake in the stock by institutions, LendingTree's stock price might be vulnerable to their trading decisions

• A total of 9 investors have a majority stake in the company with 52% ownership

• Insider ownership in LendingTree is 18%

If you want to know who really controls LendingTree, Inc. (NASDAQ:TREE), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 65% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Last week’s 28% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 3.8%.

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

See our latest analysis for LendingTree

What Does The Institutional Ownership Tell Us About LendingTree?

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.

We can see that LendingTree does have institutional investors; and they hold a good portion of the company's stock. 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 LendingTree, (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. Hedge funds don't have many shares in LendingTree. With a 17% stake, CEO Douglas Lebda is the largest shareholder. For context, the second largest shareholder holds about 12% of the shares outstanding, followed by an ownership of 5.8% by the third-largest shareholder.

We also observed that the top 9 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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