Individual investors own 32% of Fortum Oyj (HEL:FORTUM) shares but state or government control 52% of the company

Key Insights

• Fortum Oyj's significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
• Finland owns 51% of the company
• Insiders have been buying lately

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. We can see that state or government own the lion's share in the company with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, individual investors make up 32% of the company’s shareholders.

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

Check out 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 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 Fortum Oyj's earnings history below. Of course, the future is what really matters.

Fortum Oyj is not owned by hedge funds. Finland is currently the company's largest shareholder with 51% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 2.2% and 2.0% of the shares outstanding respectively, Ilmarinen Pension Insurance Co. Ltd, Asset Management Arm and BlackRock, Inc. are the second and third largest shareholders.

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

Insider Ownership Of Fortum Oyj

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own less than 1% of Fortum Oyj. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own €5.8m worth of shares (at current prices). 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 32% 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. Take risks for example - Fortum Oyj has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.