The Impacts Of Institutional Stock Ownership On Stock Returns And Performance: A Financial Market Perspective

Abstract

Recent studies indicate that corporations with high Institutional ownership have higher stock prices than those with less Institutional ownership. Even small companies with high Institutional ownership have higher stock prices in their range. Institutions have researchers and analysts to investigate the financials and the industry potential of the firms. As a result, the perception is that high institutional ownership indicates good value. This study investigates if the percentage of institutional ownership directly correlates with the price of stocks. The relationship between the Institutional ownerships and price was prevalent. This was more indicative among the large cap stocks than the small caps stocks. It was also found that the higher the percentage of Institutional ownership does reflect a higher stock price. This was manifest among the large caps than the small caps.