Fresh Del Monte Produce Inc.'s (NYSE:FDP) high institutional ownership speaks for itself as stock continues to impress, up 4.0% over last week

Key Insights

• Significantly high institutional ownership implies Fresh Del Monte Produce's stock price is sensitive to their trading actions
• A total of 5 investors have a majority stake in the company with 51% ownership
• Recent sales by insiders

Every investor in Fresh Del Monte Produce Inc. (NYSE:FDP) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 66% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Last week’s 4.0% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. One-year return to shareholders is currently 52% and last week’s gain was the icing on the cake.

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

View our latest analysis for Fresh Del Monte Produce

What Does The Institutional Ownership Tell Us About Fresh Del Monte Produce?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Fresh Del Monte Produce 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Fresh Del Monte Produce's earnings history below. Of course, the future is what really matters.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Fresh Del Monte Produce is not owned by hedge funds. With a 15% stake, CEO Mohammad Abu-Ghazaleh is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 12% and 9.8%, of the shares outstanding, respectively.

On looking further, we found that 51% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Fresh Del Monte Produce

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.

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.

It seems insiders own a significant proportion of Fresh Del Monte Produce Inc.. It has a market capitalization of just US$1.6b, and insiders have US$356m worth of shares in their own names. That's quite significant. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Fresh Del Monte Produce. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Fresh Del Monte Produce , and understanding them should be part of your investment process.

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.