Institutional investors are Technip Energies N.V.'s (EPA:TE) biggest bettors and were rewarded after last week's €196m market cap gain

Key Insights

• Significantly high institutional ownership implies Technip Energies' stock price is sensitive to their trading actions
• 50% of the business is held by the top 14 shareholders
• Insiders have been selling lately

To get a sense of who is truly in control of Technip Energies N.V. (EPA:TE), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And things are looking up for institutional investors after the company gained €196m in market cap last week. The one-year return on investment is currently 16% and last week's gain would have been more than welcomed.

Let's take a closer look to see what the different types of shareholders can tell us about Technip Energies.

See our latest analysis for Technip Energies

What Does The Institutional Ownership Tell Us About Technip Energies?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Technip Energies 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. 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 Technip Energies' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Technip Energies. HAL Investments B.V. is currently the largest shareholder, with 16% of shares outstanding. With 11% and 6.7% of the shares outstanding respectively, Bpifrance Participations SA and Wellington Management Group LLP are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 14 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 Technip Energies

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 information suggests that Technip Energies N.V. insiders own under 1% of the company. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around €7.6m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 33% 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.

Private Equity Ownership

With a stake of 26%, private equity firms could influence the Technip Energies board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Technip Energies better, we need to consider many other factors. For instance, we've identified 1 warning sign for Technip Energies that you should be aware of.

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.

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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.