Key Insights
-
Institutions' substantial holdings in Tullow Oil implies that they have significant influence over the company's share price
-
50% of the business is held by the top 8 shareholders
-
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
A look at the shareholders of Tullow Oil plc ( LON:TLW ) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 65% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
After a year of 50% losses, last week's 19% gain would be welcomed by institutional investors as a possible sign that returns might start trending higher.
Let's take a closer look to see what the different types of shareholders can tell us about Tullow Oil.
View our latest analysis for Tullow Oil
What Does The Institutional Ownership Tell Us About Tullow Oil?
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.
As you can see, institutional investors have a fair amount of stake in Tullow Oil. 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. 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 Tullow Oil, (below). Of course, keep in mind that there are other factors to consider, too.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Tullow Oil. Looking at our data, we can see that the largest shareholder is azValor Asset Management SGIIC, S.A.U. with 15% of shares outstanding. Samuel Dossou-Aworet is the second largest shareholder owning 7.1% of common stock, and Aberdeen Group Plc holds about 6.4% of the company stock.
We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Tullow Oil
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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.
Shareholders would probably be interested to learn that insiders own shares in Tullow Oil plc. As individuals, the insiders collectively own UK£12m worth of the UK£130m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. 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 Tullow Oil. 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.
Private Company Ownership
It seems that Private Companies own 14%, of the Tullow Oil stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
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. For instance, we've identified 2 warning signs for Tullow Oil that you should be aware of.
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 .
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.
