After losing 3.3% in the past year, Precision Drilling Corporation (TSE:PD) institutional owners must be relieved by the recent gain

Key Insights

• Given the large stake in the stock by institutions, Precision Drilling's stock price might be vulnerable to their trading decisions
• A total of 25 investors have a majority stake in the company with 44% ownership
• Insiders have sold recently

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If you want to know who really controls Precision Drilling Corporation (TSE:PD), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 52% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutional investors would probably welcome last week's 6.9% increase in the share price after a year of 3.3% losses as a sign that returns may to begin trending higher.

In the chart below, we zoom in on the different ownership groups of Precision Drilling.

View our latest analysis for Precision Drilling

What Does The Institutional Ownership Tell Us About Precision Drilling?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Precision Drilling already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Precision Drilling's earnings history below. Of course, the future is what really matters.

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Precision Drilling is not owned by hedge funds. National Bank Investments Inc. is currently the largest shareholder, with 5.6% of shares outstanding. Encompass Capital Advisors LLC is the second largest shareholder owning 4.2% of common stock, and BMO Asset Management Corp. holds about 3.7% of the company stock. In addition, we found that Carey Ford, the CEO has 0.5% of the shares allocated to their name.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Precision Drilling

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

We can see that insiders own shares in Precision Drilling Corporation. In their own names, insiders own CA$28m worth of stock in the CA$1.1b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 46% stake in Precision Drilling. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for Precision Drilling that you should be aware of before investing here.

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.

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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.