Yahoo Finance Petrofac Limited's (LON:PFC) 15% loss last week hit both individual investors who own 42% as well as institutions
Key Insights
The considerable ownership by individual investors in Petrofac indicates that they collectively have a greater say in management and business strategy
A total of 6 investors have a majority stake in the company with 51% ownership
A look at the shareholders of Petrofac Limited (LON:PFC) can tell us which group is most powerful. With 42% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Following a 15% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 41% stock also took a hit.
Let's delve deeper into each type of owner of Petrofac, beginning with the chart below.
View our latest analysis for Petrofac
What Does The Institutional Ownership Tell Us About Petrofac?
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 Petrofac. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Petrofac, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Petrofac. Our data shows that Ayman Asfari is the largest shareholder with 16% of shares outstanding. For context, the second largest shareholder holds about 15% of the shares outstanding, followed by an ownership of 9.5% by the third-largest shareholder.
We did some more digging and found that 6 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Petrofac
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own a reasonable proportion of Petrofac Limited. Insiders own UK£44m worth of shares in the UK£262m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 42% stake in the company, and hence can't easily be ignored. 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.
I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
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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.
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