Recent uptick might appease Phillips 66 (NYSE:PSX) institutional owners after losing 6.0% over the past year

Key Insights

• Significantly high institutional ownership implies Phillips 66's stock price is sensitive to their trading actions
• A total of 19 investors have a majority stake in the company with 51% ownership
• Recent purchases by insiders

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

To get a sense of who is truly in control of Phillips 66 (NYSE:PSX), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 77% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Last week's US$2.9b market cap gain would probably be appreciated by institutional investors, especially after a year of 6.0% losses.

Let's take a closer look to see what the different types of shareholders can tell us about Phillips 66.

View our latest analysis for Phillips 66

What Does The Institutional Ownership Tell Us About Phillips 66?

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.

Phillips 66 already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Phillips 66's historic earnings and revenue below, but keep in mind there's always more to the story.

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 Phillips 66. The Vanguard Group, Inc. is currently the company's largest shareholder with 9.9% of shares outstanding. With 7.3% and 6.4% of the shares outstanding respectively, BlackRock, Inc. and State Street Global Advisors, Inc. are the second and third largest shareholders.

After doing some more digging, we found that the top 19 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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 Phillips 66

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own less than 1% of Phillips 66. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own US$138m of stock. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 23% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Phillips 66 better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Phillips 66 (of which 1 is a bit unpleasant!) you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.