Stock Analysis

While individual investors own 30% of Fortum Oyj (HEL:FORTUM), state or government are its largest shareholders with 52% ownership

Source: Shutterstock

Key Insights

  • The considerable ownership by state or government in Fortum Oyj indicates that they collectively have a greater say in management and business strategy
  • The largest shareholder of the company is Finland with a 51% stake
  • Insiders have bought recently

A look at the shareholders of Fortum Oyj (HEL:FORTUM) can tell us which group is most powerful. 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).

Individual investors, on the other hand, account for 30% of the company's stockholders.

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

See our latest analysis for Fortum Oyj

HLSE:FORTUM Ownership Breakdown December 3rd 2023

What Does The Institutional Ownership Tell Us About Fortum Oyj?

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.

Fortum Oyj already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Fortum Oyj, (below). Of course, keep in mind that there are other factors to consider, too.

HLSE:FORTUM Earnings and Revenue Growth December 3rd 2023

We note that hedge funds don't have a meaningful investment in Fortum Oyj. The company's largest shareholder is Finland, with ownership of 51%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. In comparison, the second and third largest shareholders hold about 2.1% and 2.0% of the stock.

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

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 information suggests that Fortum Oyj 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 €3.4m worth of shares. 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-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Fortum Oyj better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Fortum Oyj , and understanding them should be part of your investment process.

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 Fortum 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.

View the Free Analysis