In This Article:
Key Insights
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The considerable ownership by individual investors in Frontline indicates that they collectively have a greater say in management and business strategy
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The top 7 shareholders own 50% of the company
To get a sense of who is truly in control of Frontline plc (NYSE:FRO), it is important to understand the ownership structure of the business. With 36% stake, individual investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While the holdings of individual investors took a hit after last week’s 7.3% price drop, insiders with their 36% also suffered.
In the chart below, we zoom in on the different ownership groups of Frontline.
Check out our latest analysis for Frontline
What Does The Institutional Ownership Tell Us About Frontline?
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.
We can see that Frontline 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. 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 Frontline's historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Frontline. John Fredriksen is currently the company's largest shareholder with 36% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.9% and 3.0% of the stock.
We also observed that the top 7 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.
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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Frontline
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.