Institutional investors could take tough steps after PENN Entertainment, Inc. (NASDAQ:PENN)’s recent 4.0% drop added to its full-year losses

A look at PENN Entertainment, Inc. (NASDAQ:PENN) shareholders can tell us which group is the strongest. And the group holding the biggest piece of the pie are institutions with 86% ownership. In other words, the group is exposed to maximum upside (or downside risk).

It follows that institutional investors were the hardest-hit group after the company’s market cap fell 4.0% to $5.5 billion last week following a fall in the share price. Needless to say, the recent loss, which further adds to shareholders’ 33% year-on-year loss, may not go down well with this particular category of shareholders. Institutions, often referred to as “market makers,” wield significant power in influencing the price momentum of any stock. Therefore, if the decline continues, institutional investors could be pressured to sell PENN Entertainment, which could hurt individual investors.

Let’s dive deeper into each type of PENN Entertainment owner, starting with the table below.

Check out our latest analysis for PENN Entertainment

property breakdown

property breakdown

What Does Institutional Ownership Tell Us About PENN Entertainment?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. As such, they typically consider buying larger companies that are included in the relevant benchmark index.

We can see that PENN Entertainment has institutional investors; and they hold a good portion of the company’s stock. This means that the analysts who work for these institutes have looked at the stock and like it. But just like everyone else, they can be wrong. It’s not uncommon for the stock price to fall sharply when two large institutional investors attempt to sell a stock at the same time. So, it’s worth reviewing PENN Entertainment’s earnings history to date (below). Of course, keep in mind that there are other factors to consider as well.

Profit and Revenue Growth

Profit and Revenue Growth

With institutional investors owning more than half of the outstanding shares, the board likely needs to be mindful of their preferences. We find that hedge funds have no meaningful investment in PENN Entertainment. FMR LLC is currently the company’s largest shareholder with 13% of the outstanding shares. The second and third largest shareholders hold 10% and 9.5% of the outstanding shares, respectively.

We investigated further and found that 7 of the top shareholders make up around 50% of the register, meaning there are some smaller shareholders alongside larger shareholders, somewhat balancing the interests of the others.

While examining a company’s institutional ownership can add value to your research, it’s also a good practice to research analyst recommendations to gain a deeper understanding of a stock’s expected performance. Quite a few analysts cover the stock, so you can easily look at the projected growth.

Insider ownership of PENN Entertainment

The definition of an insider may differ slightly from country to country, but board members always count. The management of the company is accountable to the board of directors, which should represent the interests of the shareholders. It is noteworthy that sometimes high-ranking managers themselves sit on the board.

Insider ownership is positive when it signals leadership thinks like the true owners of the company. However, a high proportion of insiders can give immense power to even a small group within the organization. This can sometimes be negative.

Our latest data shows that insiders own some PENN Entertainment, Inc. stock. The insiders have a significant stake worth $104 million. Most would see this as a really positive thing. If you’re interested in investigating insider targeting, you can click here to see if insiders bought or sold.

General Public Property

With a 12% stake, the general public, consisting primarily of individual investors, has some influence over PENN Entertainment. While this group may not necessarily be in charge, it certainly can have a real impact on how the company is run.

Next Steps:

I find it very interesting to see who exactly owns a company. But to really gain insight, we need to consider other information as well. For example, we discovered 2 warning signs for PENN Entertainment you should know before you invest here.

Eventually the future is the most important thing. You can access it free Report on analysts’ forecasts for the company.

Note: The figures in this article are calculated using data for the last twelve months, relating to the 12-month period ending on the last date of the month to which the financial statements are dated. This may not tally with the annual report figures for the full year.

Do you have any feedback about this article? Concerned about the content? Get in touch directly with us. Alternatively, send an email to the editorial team (at) simplywallst.com.

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

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