Advertisement
Canada markets closed
  • S&P/TSX

    21,531.07
    -21.28 (-0.10%)
     
  • S&P 500

    5,130.95
    -6.13 (-0.12%)
     
  • DOW

    38,989.83
    -97.55 (-0.25%)
     
  • CAD/USD

    0.7367
    -0.0012 (-0.16%)
     
  • CRUDE OIL

    78.76
    +0.02 (+0.03%)
     
  • Bitcoin CAD

    92,544.50
    +7,294.71 (+8.56%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,123.10
    -3.20 (-0.15%)
     
  • RUSSELL 2000

    2,074.31
    -2.09 (-0.10%)
     
  • 10-Yr Bond

    4.2190
    +0.0390 (+0.93%)
     
  • NASDAQ futures

    18,244.25
    -94.00 (-0.51%)
     
  • VOLATILITY

    13.49
    +0.38 (+2.90%)
     
  • FTSE

    7,640.33
    -42.17 (-0.55%)
     
  • NIKKEI 225

    40,109.23
    +198.41 (+0.50%)
     
  • CAD/EUR

    0.6783
    -0.0019 (-0.28%)
     

Exelon Corporation (NASDAQ:EXC) is largely controlled by institutional shareholders who own 84% of the company

Key Insights

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

  • A total of 14 investors have a majority stake in the company with 50% ownership

  • Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in Exelon Corporation (NASDAQ:EXC) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 84% ownership. 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.

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

View our latest analysis for Exelon

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Exelon?

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 Exelon. 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. 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 Exelon, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
earnings-and-revenue-growth

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Exelon. Wellington Management Group LLP is currently the company's largest shareholder with 9.1% of shares outstanding. For context, the second largest shareholder holds about 9.1% of the shares outstanding, followed by an ownership of 8.7% by the third-largest shareholder.

After doing some more digging, we found that the top 14 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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.

Insider Ownership Of Exelon

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our data suggests that insiders own under 1% of Exelon Corporation in their own names. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own US$40m of stock. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 16% stake in Exelon. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with Exelon (including 1 which doesn't sit too well with us) .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.