- Energy Services
Both individual investors who control a good portion of Borr Drilling Limited (OB:BORR) along with institutions must be dismayed after last week's 11% decrease
- The considerable ownership by individual investors in Borr Drilling indicates that they collectively have a greater say in management and business strategy
- The top 18 shareholders own 50% of the company
- Institutions own 35% of Borr Drilling
A look at the shareholders of Borr Drilling Limited (OB:BORR) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Following a 11% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 35% stock also took a hit.
Let's delve deeper into each type of owner of Borr Drilling, beginning with the chart below.
View our latest analysis for Borr Drilling
What Does The Institutional Ownership Tell Us About Borr Drilling?
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.
Borr Drilling already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Borr Drilling's historic earnings and revenue below, but keep in mind there's always more to the story.
It looks like hedge funds own 11% of Borr Drilling shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Granular Capital Ltd is currently the largest shareholder, with 11% of shares outstanding. Orbis Investment Management Limited is the second largest shareholder owning 10% of common stock, and BlackRock, Inc. holds about 5.1% of the company stock.
A closer look at our ownership figures suggests that the top 18 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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Borr Drilling
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.
We can report that insiders do own shares in Borr Drilling Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around kr570m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public, who are usually individual investors, hold a 44% stake in Borr Drilling. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
Our data indicates that Private Companies hold 4.0%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Borr Drilling , and understanding them should be part of your investment process.
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.
Borr Drilling Limited operates as an offshore drilling contractor to the oil and gas industry worldwide.
Exceptional growth potential and overvalued.