With 85% ownership of the shares, Freeport-McMoRan Inc. (NYSE:FCX) is heavily dominated by institutional owners

• Given the large stake in the stock by institutions, Freeport-McMoRan's stock price might be vulnerable to their trading decisions

• The top 18 shareholders own 51% of the company

• Insiders have been selling lately [1]

Every investor in Freeport-McMoRan Inc. (NYSE:FCX[2]) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 85% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors.

Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

Let's delve deeper into each type of owner of Freeport-McMoRan, beginning with the chart below.

View our latest analysis for Freeport-McMoRan [3]

NYSE:FCX Ownership Breakdown December 27th 2024

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 Freeport-McMoRan 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. 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 Freeport-McMoRan's earnings history below. Of course, the future is what really matters.

NYSE:FCX Earnings and Revenue Growth December 27th 2024

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Freeport-McMoRan.

Looking at our data, we can see that the largest shareholder is The Vanguard Group, Inc. with 8.5% of shares outstanding. With 8.3% and 7.6% of the shares outstanding respectively, Capital Research and Management Company and BlackRock, Inc. are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 18 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Story Continues

The definition of an insider can differ slightly between different countries, but members of the board of directors always count.

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.

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£270m worth of shares. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling. [4]

The general public-- including retail investors -- own 15% stake in the company, and hence can't easily be ignored.

While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 Freeport-McMoRan is showing 1 warning sign in our investment analysis [5], you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company[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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.[7] 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.

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References

1. ^ Insiders have been selling lately (simplywall.st)
2. ^ NYSE:FCX (au.finance.yahoo.com)
3. ^ View our latest analysis for Freeport-McMoRan (simplywall.st)
4. ^ see if those insiders have been buying or selling. (simplywall.st)
5. ^ Freeport-McMoRan is showing 1 warning sign in our investment analysis (simplywall.st)
6. ^ report on analyst forecasts for the company (simplywall.st)
7. ^ Get in touch (investor-research.typeform.com)