Key Insights

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

• A total of 13 investors have a majority stake in the company with 51% ownership

• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Webster Financial Corporation (NYSE:WBS), 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 88% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutional investors would appreciate the 8.2% increase in share prices last week, given their one-year returns have been disappointing at 2.3%.

In the chart below, we zoom in on the different ownership groups of Webster Financial.

Check out our latest analysis for Webster Financial

What Does The Institutional Ownership Tell Us About Webster Financial?

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.

As you can see, institutional investors have a fair amount of stake in Webster Financial. 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. 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 Webster Financial'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. We note that hedge funds don't have a meaningful investment in Webster Financial. Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 10% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 5.0%, of the shares outstanding, respectively.

A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.