Significant control over Drilling Tools International by private equity firms implies that the general public has more power to influence management and governance-related decisions
The top 2 shareholders own 54% of the company
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
A look at the shareholders of Drilling Tools International Corporation (NASDAQ:DTI) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private equity firms with 46% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Individual investors, on the other hand, account for 30% of the company's stockholders.
Let's take a closer look to see what the different types of shareholders can tell us about Drilling Tools International.
What Does The Institutional Ownership Tell Us About Drilling Tools 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.
We can see that Drilling Tools International does have institutional investors; and they hold a good portion of the company's stock. 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 Drilling Tools International, (below). Of course, keep in mind that there are other factors to consider, too.
NasdaqCM:DTI Earnings and Revenue Growth October 1st 2024
Drilling Tools International is not owned by hedge funds. Hicks Equity Partners LLC is currently the company's largest shareholder with 46% of shares outstanding. With 8.0% and 4.2% of the shares outstanding respectively, ROC Energy Holdings, LLC and Michael Domino are the second and third largest shareholders. In addition, we found that R. Prejean, the CEO has 1.3% of the shares allocated to their name.
To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Drilling Tools International
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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.
Shareholders would probably be interested to learn that insiders own shares in Drilling Tools International Corporation. As individuals, the insiders collectively own US$11m worth of the US$130m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 30% 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.
Private Equity Ownership
Private equity firms hold a 46% stake in Drilling Tools International. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
Private Company Ownership
Our data indicates that Private Companies hold 8.1%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
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.
