A total of 25 investors have a majority stake in the company with 49% ownership
To get a sense of who is truly in control of Petrofac Limited (LON:PFC), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 60% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Following a 11% increase in the stock price last week, individual investors profited the most, but institutions who own 23% stock also stood to gain from the increase.
In the chart below, we zoom in on the different ownership groups of Petrofac.
Check out our latest analysis for Petrofac
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.
Petrofac 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. 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 Petrofac, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in Petrofac. Ayman Asfari is currently the largest shareholder, with 16% of shares outstanding. In comparison, the second and third largest shareholders hold about 15% and 9.4% of the stock.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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.
It seems insiders own a significant proportion of Petrofac Limited. It has a market capitalization of just UK£92m, and insiders have UK£15m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
The general public -- including retail investors -- own 60% of Petrofac. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
It's always worth thinking about the different groups who own shares in a company. But to understand Petrofac better, we need to consider many other factors. Be aware that Petrofac is showing 2 warning signs in our investment analysis , you should know about...
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.