In This Article:
Key Insights
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Significantly high institutional ownership implies Fortinet's stock price is sensitive to their trading actions
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A total of 15 investors have a majority stake in the company with 51% ownership
To get a sense of who is truly in control of Fortinet, Inc. (NASDAQ:FTNT), it is important to understand the ownership structure of the business. With 70% 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.
Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or 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 delve deeper into each type of owner of Fortinet, beginning with the chart below.
See our latest analysis for Fortinet
What Does The Institutional Ownership Tell Us About Fortinet?
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.
As you can see, institutional investors have a fair amount of stake in Fortinet. 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 Fortinet's earnings history below. Of course, the future is what really matters.
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 Fortinet. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 8.8%. Ken Xie is the second largest shareholder owning 8.3% of common stock, and Michael Xie holds about 7.4% of the company stock. Note that the second and third-largest shareholders are also Chief Executive Officer and Member of the Board of Directors, respectively, meaning that the company's top shareholders are insiders.
Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 15 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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.