Institutional investors have a lot riding on Freeport-McMoRan Inc. (NYSE:FCX) with 82% ownership

Key Insights

Significantly high institutional ownership implies Freeport-McMoRan's stock price is sensitive to their trading actions
51% of the business is held by the top 20 shareholders
Analyst forecasts [1] along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Freeport-McMoRan Inc. (NYSE:FCX [2]), 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 82% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And things are looking up for institutional investors after the company gained US£2.8b in market cap last week. One-year return to shareholders is currently 17% and last week's gain was the icing on the cake. Let's delve deeper into each type of owner of Freeport-McMoRan, beginning with the chart below.

Check out our latest analysis for Freeport-McMoRan [3]

NYSE:FCX Ownership Breakdown March 31st 2024

What Does The Institutional Ownership Tell Us About Freeport-McMoRan?

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. Freeport-McMoRan already has institutions on the share registry.

Indeed, they own a respectable stake in the company. 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 Freeport-McMoRan's historic earnings and revenue below, but keep in mind there's always more to the story.

NYSE:FCX Earnings and Revenue Growth March 31st 2024

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Freeport-McMoRan. The Vanguard Group, Inc. is currently the largest shareholder, with 8.3% of shares outstanding.

In comparison, the second and third largest shareholders hold about 7.7% and 4.9% of the stock. A closer look at our ownership figures suggests that the top 20 shareholders have a combined ownership of 51% implying that no single shareholder has a majority. 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 Freeport-McMoRan

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.

Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO. 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. Our data suggests that insiders own under 1% of Freeport-McMoRan Inc. in their own names. It is a very large company, so it would be surprising to see insiders own a large proportion of the company.

Though their holding amounts to less than 1%, we can see that board members collectively own US£279m worth of shares (at current prices). It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.[4]

General Public Ownership

The general public, who are usually individual investors, hold a 18% stake in Freeport-McMoRan. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

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. For instance, we've identified 1 warning sign for Freeport-McMoRan [5] that you should be aware of. 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 [6]. 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.

Valuation is complex, but we're helping make it simple.

Find out whether Freeport-McMoRan is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis [7]

Have feedback on this article?

Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.[8] 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.

References

^ Analyst forecasts (simplywall.st)
^ NYSE:FCX (simplywall.st)
^ Check out our latest analysis for Freeport-McMoRan (simplywall.st)
^ if those insiders have been buying. (simplywall.st)
^ 1 warning sign for Freeport-McMoRan (simplywall.st)
^ this free report showing analyst forecasts for its future (simplywall.st)
^ View the Free Analysis (simplywall.st)
^ Get in touch (feedback.simplywall.st)