Teekay Corporation Ltd.'s (NYSE:TK) institutional investors lost 7.1% last week but have benefitted from longer-term gains

Simply Wall St · 10/15 10:51

Key Insights

  • Institutions' substantial holdings in Teekay implies that they have significant influence over the company's share price
  • The top 4 shareholders own 51% of the company
  • Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Teekay Corporation Ltd. (NYSE:TK) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 90% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Institutional investors endured the highest losses after the company's market cap fell by US$62m last week. However, the 36% one-year return to shareholders might have softened the blow. But they would probably be wary of future losses.

In the chart below, we zoom in on the different ownership groups of Teekay.

See our latest analysis for Teekay

ownership-breakdown
NYSE:TK Ownership Breakdown October 15th 2024

What Does The Institutional Ownership Tell Us About Teekay?

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.

Teekay already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Teekay, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
NYSE:TK Earnings and Revenue Growth October 15th 2024

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. We note that hedge funds don't have a meaningful investment in Teekay. Our data shows that Kattegat Limited is the largest shareholder with 35% of shares outstanding. With 6.0% and 5.3% of the shares outstanding respectively, Dimensional Fund Advisors LP and Cobas Asset Management, SGIIC, SA are the second and third largest shareholders.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Teekay

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.

We note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Teekay. 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:

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.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.