U.S. markets open in 18 minutes
  • S&P Futures

    3,960.25
    +23.50 (+0.60%)
     
  • Dow Futures

    33,776.00
    +151.00 (+0.45%)
     
  • Nasdaq Futures

    11,578.00
    +68.50 (+0.60%)
     
  • Russell 2000 Futures

    1,819.50
    +11.50 (+0.64%)
     
  • Crude Oil

    74.65
    +2.64 (+3.67%)
     
  • Gold

    1,802.40
    +4.40 (+0.24%)
     
  • Silver

    23.26
    +0.34 (+1.50%)
     
  • EUR/USD

    1.0527
    +0.0013 (+0.13%)
     
  • 10-Yr Bond

    3.4770
    +0.0690 (+2.02%)
     
  • Vix

    22.71
    +0.54 (+2.44%)
     
  • GBP/USD

    1.2217
    +0.0012 (+0.10%)
     
  • USD/JPY

    136.5970
    +0.0730 (+0.05%)
     
  • BTC-USD

    16,855.88
    +0.06 (+0.00%)
     
  • CMC Crypto 200

    396.64
    -5.39 (-1.34%)
     
  • FTSE 100

    7,493.01
    +3.82 (+0.05%)
     
  • Nikkei 225

    27,574.43
    -111.97 (-0.40%)
     

After losing 13% in the past year, Morgan Stanley (NYSE:MS) institutional owners must be relieved by the recent gain

To get a sense of who is truly in control of Morgan Stanley (NYSE:MS), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 63% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Last week's US$7.7b market cap gain would probably be appreciated by institutional investors, especially after a year of 13% losses.

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

See our latest analysis for Morgan Stanley

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Morgan Stanley?

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.

We can see that Morgan Stanley does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Morgan Stanley's historic earnings and revenue below, but keep in mind there's always more to the story.

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

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Morgan Stanley is not owned by hedge funds. Our data shows that Mitsubishi UFJ Financial Group, Inc. is the largest shareholder with 22% of shares outstanding. With 7.1% and 6.9% of the shares outstanding respectively, State Street Global Advisors, Inc. and The Vanguard Group, Inc. are the second and third largest shareholders.

We also observed that the top 8 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.

Insider Ownership Of Morgan Stanley

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that Morgan Stanley insiders own under 1% of the company. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own US$365m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 15% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 22% of the Morgan Stanley shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Morgan Stanley better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here