Stock Analysis

Metso Outotec Oyj's (HEL:MOCORP) latest 7.3% decline adds to one-year losses, institutional investors may consider drastic measures

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HLSE:MOCORP
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Every investor in Metso Outotec Oyj (HEL:MOCORP) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, institutional investors endured the highest losses last week after market cap fell by €466m. The recent loss, which adds to a one-year loss of 9.4% for stockholders, may not sit well with this group of investors. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. As a result, if the downtrend continues, institutions may face pressures to sell Metso Outotec Oyj, which might have negative implications on individual investors.

Let's delve deeper into each type of owner of Metso Outotec Oyj, beginning with the chart below.

Check out our latest analysis for Metso Outotec Oyj

ownership-breakdown
HLSE:MOCORP Ownership Breakdown September 24th 2022

What Does The Institutional Ownership Tell Us About Metso Outotec Oyj?

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.

We can see that Metso Outotec Oyj 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 Metso Outotec Oyj's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
HLSE:MOCORP Earnings and Revenue Growth September 24th 2022

Hedge funds don't have many shares in Metso Outotec Oyj. Looking at our data, we can see that the largest shareholder is Solidium Oy with 15% of shares outstanding. For context, the second largest shareholder holds about 3.7% of the shares outstanding, followed by an ownership of 2.9% by the third-largest shareholder.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Metso Outotec Oyj

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our data suggests that insiders own under 1% of Metso Outotec Oyj in their own names. Keep in mind that it's a big company, and the insiders own €6.0m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in Metso Outotec Oyj. 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.

Private Equity Ownership

With an ownership of 15%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Metso Outotec Oyj better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Metso Outotec Oyj .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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 Metso Outotec Oyj 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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About HLSE:MOCORP

Metso Outotec Oyj

Metso Outotec Oyj provides technologies, end-to-end solutions, and services for aggregates, minerals processing, and metals refining industries in Europe, North and Central America, South America, the Asia Pacific, Africa, the Middle East, and India.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation3
Future Growth5
Past Performance5
Financial Health4
Dividends1

Read more about these checks in the individual report sections or in our analysis model.

Solid track record with high growth potential.