Babcock & Wilcox Enterprises, Inc.'s (NYSE:BW) 17% loss last week hit both individual investors who own 49% as well as institutions

Key Insights

• The considerable ownership by individual investors in Babcock & Wilcox Enterprises indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 47% ownership
• Insiders have been buying lately

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A look at the shareholders of Babcock & Wilcox Enterprises, Inc. (NYSE:BW) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 49% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 29% came under pressure after market cap dropped to US$203m last week,individual investors took the most losses.

Let's delve deeper into each type of owner of Babcock & Wilcox Enterprises, beginning with the chart below.

View our latest analysis for Babcock & Wilcox Enterprises

What Does The Institutional Ownership Tell Us About Babcock & Wilcox Enterprises?

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.

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

Hedge funds don't have many shares in Babcock & Wilcox Enterprises. B. Riley Financial, Inc. is currently the largest shareholder, with 12% of shares outstanding. With 6.1% and 4.3% of the shares outstanding respectively, Neuberger Berman Investment Advisers LLC and Castleknight Management LP are the second and third largest shareholders. Furthermore, CEO Kenneth Young is the owner of 1.7% of the company's shares.

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.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Babcock & Wilcox Enterprises

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 information suggests that insiders maintain a significant holding in Babcock & Wilcox Enterprises, Inc.. Insiders own US$21m worth of shares in the US$203m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 49% 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.

Public Company Ownership

It appears to us that public companies own 12% of Babcock & Wilcox Enterprises. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 4 warning signs for Babcock & Wilcox Enterprises (1 is significant) that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.