Fortum Oyj's (HEL:FORTUM) stock price dropped 4.2% last week; state or government would not be happy

Key Insights

• Fortum Oyj's significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
• 51% of the company is held by a single shareholder (Finland)
• Insiders have bought recently

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To get a sense of who is truly in control of Fortum Oyj (HEL:FORTUM), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are state or government with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to €16b last week, state or government would have faced the highest losses than any other shareholder groups of the company.

In the chart below, we zoom in on the different ownership groups of Fortum Oyj.

See our latest analysis for Fortum Oyj

What Does The Institutional Ownership Tell Us About Fortum 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 Fortum 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 Fortum Oyj's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Fortum Oyj. Finland is currently the largest shareholder, with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 2.3% and 2.1%, of the shares outstanding, respectively.

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 Fortum Oyj

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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 information suggests that Fortum Oyj insiders own under 1% of the company. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own €35m of stock. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Fortum 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.

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. Be aware that Fortum Oyj is showing 1 warning sign in our investment analysis , you should know about...

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.

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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.