Stock Analysis

WEC Energy Group, Inc.'s (NYSE:WEC) recent 3.0% pullback adds to one-year year losses, institutional owners may take drastic measures

NYSE:WEC
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Key Insights

  • Given the large stake in the stock by institutions, WEC Energy Group's stock price might be vulnerable to their trading decisions
  • A total of 21 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

If you want to know who really controls WEC Energy Group, Inc. (NYSE:WEC), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 80% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And institutional investors endured the highest losses after the company's share price fell by 3.0% last week. The recent loss, which adds to a one-year loss of 15% for stockholders, may not sit well with this group of investors. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. As a result, if the downtrend continues, institutions may face pressures to sell WEC Energy Group, which might have negative implications on individual investors.

In the chart below, we zoom in on the different ownership groups of WEC Energy Group.

See our latest analysis for WEC Energy Group

ownership-breakdown
NYSE:WEC Ownership Breakdown April 16th 2024

What Does The Institutional Ownership Tell Us About WEC Energy Group?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that WEC Energy Group does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at WEC Energy Group's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
NYSE:WEC Earnings and Revenue Growth April 16th 2024

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in WEC Energy Group. The company's largest shareholder is The Vanguard Group, Inc., with ownership of 13%. For context, the second largest shareholder holds about 9.1% of the shares outstanding, followed by an ownership of 5.6% by the third-largest shareholder.

A closer look at our ownership figures suggests that the top 21 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of WEC Energy Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that WEC Energy Group, Inc. 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$43m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in WEC Energy Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand WEC Energy Group better, we need to consider many other factors. For example, we've discovered 2 warning signs for WEC Energy Group (1 is concerning!) that you should be aware of before investing here.

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.

Valuation is complex, but we're helping make it simple.

Find out whether WEC Energy Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.