Institutional owners may ignore Oceaneering International, Inc.'s (NYSE:OII) recent US$133m market cap decline as longer-term profits stay in the green

By
Simply Wall St
Published
November 30, 2021
NYSE:OII
Source: Shutterstock

If you want to know who really controls Oceaneering International, Inc. (NYSE:OII), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 88% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Losing money on investments is something no shareholder enjoys, least of all institutional investors who saw their holdings value drop by 11% last week. However, the 65% one-year returns may have helped alleviate their overall losses. 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 Oceaneering International.

View our latest analysis for Oceaneering International

ownership-breakdown
NYSE:OII Ownership Breakdown December 1st 2021

What Does The Institutional Ownership Tell Us About Oceaneering International?

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.

Oceaneering International already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Oceaneering International's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NYSE:OII Earnings and Revenue Growth December 1st 2021

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Oceaneering International is not owned by hedge funds. The company's largest shareholder is BlackRock, Inc., with ownership of 18%. For context, the second largest shareholder holds about 11% of the shares outstanding, followed by an ownership of 7.0% by the third-largest shareholder.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Oceaneering International

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can see that insiders own shares in Oceaneering International, Inc.. This is a big company, so it is good to see this level of alignment. Insiders own US$16m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 11% stake in the company, and hence can't easily be ignored. 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 Oceaneering International better, we need to consider many other factors. For instance, we've identified 1 warning sign for Oceaneering International 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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