Occidental Petroleum Corporation (NYSE:OXY) institutional owners may be pleased with recent gains after 24% loss over the past year
Given the large stake in the stock by institutions, Occidental Petroleum’s stock price might be vulnerable to their trading decisions
52% of the business is held by the top 5 shareholders
Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
If you want to know who really controls Occidental Petroleum Corporation (NYSE:OXY), then you’ll have to look at the makeup of its share registry. We can see that institutions own the lion’s share in the company with 49% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Institutional investors would appreciate the 4.7% increase in share price last week, given their one-year losses have totalled a disappointing 24%.
In the chart below, we zoom in on the different ownership groups of Occidental Petroleum.
View our latest analysis for Occidental Petroleum
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.
Occidental Petroleum already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Occidental Petroleum’s earnings history below. Of course, the future is what really matters.
We note that hedge funds don’t have a meaningful investment in Occidental Petroleum. Berkshire Hathaway Inc. is currently the largest shareholder, with 27% of shares outstanding. The second and third largest shareholders are Dodge & Cox and The Vanguard Group, Inc., with an equal amount of shares to their name at 8.2%.
On looking further, we found that 52% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.
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.
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.
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.
Our most recent data indicates that insiders own less than 1% of Occidental Petroleum Corporation. As it is a large company, we’d only expect insiders to own a small percentage of it. But it’s worth noting that they own US$135m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.
The general public, who are usually individual investors, hold a 23% stake in Occidental Petroleum. 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.
It appears to us that public companies own 27% of Occidental Petroleum. It’s hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it’s worth watching this space for changes in ownership.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Occidental Petroleum is showing 2 warning signs in our investment analysis , you should know about…
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.
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.