Stock Analysis

With 47% ownership, FLEX LNG Ltd. (OB:FLNG) insiders have a lot riding on the company's future

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OB:FLNG
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If you want to know who really controls FLEX LNG Ltd. (OB:FLNG), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

Let's delve deeper into each type of owner of FLEX LNG, beginning with the chart below.

Check out the opportunities and risks within the NO Oil and Gas industry.

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OB:FLNG Ownership Breakdown December 1st 2022

What Does The Institutional Ownership Tell Us About FLEX LNG?

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.

As you can see, institutional investors have a fair amount of stake in FLEX LNG. 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 FLEX LNG's earnings history below. Of course, the future is what really matters.

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OB:FLNG Earnings and Revenue Growth December 1st 2022

FLEX LNG is not owned by hedge funds. Our data shows that John Fredriksen is the largest shareholder with 46% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 2.7% and 2.6%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of FLEX LNG

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of FLEX LNG Ltd.. Insiders own kr9.1b worth of shares in the kr19b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand FLEX LNG better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for FLEX LNG (of which 1 is potentially serious!) you should know about.

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 FLEX LNG 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.

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