FuelCell Energy, Inc. (NASDAQ:FCEL) surges 14%; individual investors who own 57% shares profited along with institutions

Key Insights

• The considerable ownership by individual investors in FuelCell Energy indicates that they collectively have a greater say in management and business strategy
• 37% of the business is held by the top 25 shareholders
• Institutional ownership in FuelCell Energy is 43%

Every investor in FuelCell Energy, Inc. (NASDAQ:FCEL) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While individual investors were the group that benefitted the most from last week’s US$56m market cap gain, institutions too had a 43% share in those profits.

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

View our latest analysis for FuelCell Energy

What Does The Institutional Ownership Tell Us About FuelCell Energy?

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 FuelCell Energy. 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. 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 FuelCell Energy's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in FuelCell Energy. The Vanguard Group, Inc. is currently the largest shareholder, with 9.4% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.6% and 3.7%, of the shares outstanding, respectively.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 FuelCell Energy

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 FuelCell Energy, Inc. insiders own under 1% of the company. It appears that the board holds about US$1.4m worth of stock. This compares to a market capitalization of US$406m. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public -- including retail investors -- own 57% of FuelCell Energy. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand FuelCell Energy better, we need to consider many other factors. For instance, we've identified 3 warning signs for FuelCell Energy that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.