Are the institutions heavily invested in the shares of Occidental Petroleum Corporation (NYSE: OXY)?
A look at the shareholders of Occidental Petroleum Corporation (NYSE: OXY) can tell us which group is more powerful. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. Companies that were previously state-owned tend to have fewer insiders.
With a market capitalization of US $ 28 billion, Occidental Petroleum is pretty big. We would expect to see institutional investors on the register. Companies of this size are also generally well known to retail investors. Our analysis of company ownership, below, shows that institutions own shares in the company. Let’s take a closer look at what different types of shareholders can tell us about Occidental Petroleum.
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What does institutional ownership tell us about Occidental Petroleum?
Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
We can see that Occidental Petroleum has institutional investors; and they own a large portion of the company’s shares. This implies that analysts working for these institutions have reviewed the title and appreciate it. But like everyone else, they could be wrong. When several institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes awry, several parties may compete with each other to sell stocks quickly. This risk is higher in a company without a history of growth. You can see Occidental Petroleum’s historical earnings and earnings below, but keep in mind that there is always more to tell.
Investors should note that institutions actually own more than half of the business, so they can collectively wield significant power. We note that the hedge funds do not have a significant investment in Occidental Petroleum. Our data shows that Dodge & Cox is the largest shareholder with 12% of the shares outstanding. Meanwhile, the second and third shareholders respectively hold 10% and 6.4% of the outstanding shares.
After digging a little deeper, we found that the top 16 own a combined 50% stake in the business, suggesting that no shareholder has significant control over the business.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. There are a lot of analysts covering the stock, so you can look at expected growth quite easily.
Insider ownership of Occidental Petroleum
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our data suggests that insiders own less than 1% of Occidental Petroleum Corporation in their own name. Being so important, we wouldn’t expect insiders to own a large chunk of the shares. Collectively, they own $ 57 million in stock. In this kind of situation, it may be more interesting to see if these insiders have bought or sold.
General public property
The general public, with a 31% stake in the company, will not be easily ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.
While it is worth considering the different groups that own a business, there are other factors that are even more important. Take risks for example – Occidental Petroleum has 1 warning sign we think you should be aware.
But finally it’s the future, not the past, which will determine how well the owners of this business fare. Therefore, we believe it is advisable to take a look at this free report showing whether analysts are predicting a better future.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in the mentioned stocks.
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