NYSE:RIG) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.” data-reactid=”28″>A look at the shareholders of Transocean Ltd. (NYSE:RIG) can tell us which group is most powerful. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.
Transocean is a smaller company with a market capitalization of US$750m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions own shares in the company. Let’s delve deeper into each type of owner, to discover more about Transocean.
View our latest analysis for Transocean ” data-reactid=”30″> View our latest analysis for Transocean
What Does The Institutional Ownership Tell Us About Transocean?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
We can see that Transocean 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 Transocean’s historic earnings and revenue below, but keep in mind there’s always more to the story.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don’t have a meaningful investment in Transocean. Our data shows that BlackRock, Inc. is the largest shareholder with 11% of shares outstanding. The Vanguard Group, Inc. is the second largest shareholder owning 9.6% of common stock, and PRIMECAP Management Company holds about 8.1% of the company stock.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 17 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Transocean
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
if those insiders have been selling. ” data-reactid=”72″>I can report that insiders do own shares in Transocean Ltd.. It has a market capitalization of just US$750m, and insiders have US$43m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
With a 35% ownership, the general public have some degree of sway over Transocean. 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.
Transocean is showing 2 warning signs in our investment analysis , you should know about…” data-reactid=”76″>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. Be aware that Transocean is showing 2 warning signs in our investment analysis , you should know about…
this free report showing whether analysts are predicting a brighter future.” data-reactid=”77″>But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”79″>This article by Simply Wall St is general in nature. 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.