Significantly high institutional ownership implies FTAI Infrastructure's stock price is sensitive to their trading actions
The top 11 shareholders own 50% of the company
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
Every investor in FTAI Infrastructure Inc. (NASDAQ:FIP) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 66% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's delve deeper into each type of owner of FTAI Infrastructure, beginning with the chart below.
What Does The Institutional Ownership Tell Us About FTAI Infrastructure?
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 FTAI Infrastructure does have institutional investors; and they hold a good portion of the company's stock. 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 FTAI Infrastructure's historic earnings and revenue below, but keep in mind there's always more to the story.
NasdaqGS:FIP Earnings and Revenue Growth June 18th 2024
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. It looks like hedge funds own 5.2% of FTAI Infrastructure shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that Washington State Investment Board is the largest shareholder with 12% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 7.3% of common stock, and The Vanguard Group, Inc. holds about 5.2% of the company stock.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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 is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of FTAI Infrastructure
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.
Our most recent data indicates that insiders own less than 1% of FTAI Infrastructure Inc.. It has a market capitalization of just US$802m, and the board has only US$6.6m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over FTAI Infrastructure. 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 FTAI Infrastructure better, we need to consider many other factors. For example, we've discovered 3 warning signs for FTAI Infrastructure (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
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.
