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Could Fortress Transportation and Infrastructure Investors LLC's (NYSE:FTAI) Investor Composition Influence The Stock Price?

Simply Wall St

If you want to know who really controls Fortress Transportation and Infrastructure Investors LLC (NYSE:FTAI), then you'll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. We also tend to see lower insider ownership in companies that were previously publicly owned.

Fortress Transportation and Infrastructure Investors isn't enormous, but it's not particularly small either. It has a market capitalization of US$1.4b, which means it would generally expect to see some institutions on the share registry. Taking a look at our data on the ownership groups (below), it's seems that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about FTAI.

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See our latest analysis for Fortress Transportation and Infrastructure Investors

NYSE:FTAI Ownership Summary, May 16th 2019

What Does The Institutional Ownership Tell Us About Fortress Transportation and Infrastructure Investors?

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.

Fortress Transportation and Infrastructure Investors already has institutions on the share registry. Indeed, they own 50% of 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 Fortress Transportation and Infrastructure Investors's historic earnings and revenue, below, but keep in mind there's always more to the story.

NYSE:FTAI Income Statement, May 16th 2019

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Fortress Transportation and Infrastructure Investors. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Fortress Transportation and Infrastructure Investors

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our data suggests that insiders own under 1% of Fortress Transportation and Infrastructure Investors LLC in their own names. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around US$13m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 49% ownership, the general public have some degree of sway over FTAI. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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 .

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

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.