With 82% ownership in Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), institutional investors have a lot riding on the business

Key Insights

• Significantly high institutional ownership implies Great Lakes Dredge & Dock's stock price is sensitive to their trading actions
• The top 10 shareholders own 51% of the company
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) should be aware of the most powerful shareholder groups. With 82% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Last week’s 8.1% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 52%.

In the chart below, we zoom in on the different ownership groups of Great Lakes Dredge & Dock.

Check out our latest analysis for Great Lakes Dredge & Dock

What Does The Institutional Ownership Tell Us About Great Lakes Dredge & Dock?

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.

We can see that Great Lakes Dredge & Dock does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Great Lakes Dredge & Dock, (below). Of course, keep in mind that there are other factors to consider, too.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Great Lakes Dredge & Dock. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 10% of shares outstanding. Dimensional Fund Advisors LP is the second largest shareholder owning 6.6% of common stock, and Jennison Associates LLC holds about 6.3% of the company stock. Furthermore, CEO Lasse Petterson is the owner of 1.0% of the company's shares.

On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. 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 Great Lakes Dredge & Dock

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.

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 most recent data indicates that insiders own some shares in Great Lakes Dredge & Dock Corporation. In their own names, insiders own US$14m worth of stock in the US$720m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 16% stake in Great Lakes Dredge & Dock. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Great Lakes Dredge & Dock better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Great Lakes Dredge & Dock (of which 1 is concerning!) you should know about.

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.