TechnipFMC plc's (NYSE:FTI) institutional investors lost 4.3% over the past week but have profited from longer-term gains

By
Simply Wall St
Published
November 17, 2021
NYSE:FTI
Source: Shutterstock

A look at the shareholders of TechnipFMC plc (NYSE:FTI) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 89% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutional investors endured the highest losses after the company's market cap fell by US$135m last week. However, the 13% one-year return to shareholders might have softened the blow. But they would probably be wary of future losses.

Let's take a closer look to see what the different types of shareholders can tell us about TechnipFMC.

View our latest analysis for TechnipFMC

ownership-breakdown
NYSE:FTI Ownership Breakdown November 18th 2021

What Does The Institutional Ownership Tell Us About TechnipFMC?

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 TechnipFMC does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 TechnipFMC's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NYSE:FTI Earnings and Revenue Growth November 18th 2021

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in TechnipFMC. Looking at our data, we can see that the largest shareholder is T. Rowe Price Group, Inc. with 10% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 5.2% of common stock, and Bpifrance Participations SA holds about 4.9% of the company stock.

A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 53% implying that no single shareholder has a majority.

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 TechnipFMC

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 data suggests that insiders own under 1% of TechnipFMC plc in their own names. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own US$20m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in TechnipFMC. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for TechnipFMC you should be aware of, and 1 of them can't be ignored.

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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