U.S. markets open in 4 hours 59 minutes
  • S&P Futures

    3,870.75
    -28.00 (-0.72%)
     
  • Dow Futures

    31,312.00
    -197.00 (-0.63%)
     
  • Nasdaq Futures

    13,180.25
    -99.50 (-0.75%)
     
  • Russell 2000 Futures

    2,249.10
    -25.70 (-1.13%)
     
  • Crude Oil

    59.98
    -0.66 (-1.09%)
     
  • Gold

    1,720.90
    -2.10 (-0.12%)
     
  • Silver

    26.16
    -0.52 (-1.96%)
     
  • EUR/USD

    1.2006
    -0.0054 (-0.44%)
     
  • 10-Yr Bond

    1.4460
    0.0000 (0.00%)
     
  • Vix

    24.03
    -3.92 (-14.03%)
     
  • GBP/USD

    1.3864
    -0.0056 (-0.40%)
     
  • USD/JPY

    106.8800
    +0.1500 (+0.14%)
     
  • BTC-USD

    49,092.24
    +2,095.86 (+4.46%)
     
  • CMC Crypto 200

    988.00
    +1.35 (+0.14%)
     
  • FTSE 100

    6,579.58
    -8.95 (-0.14%)
     
  • Nikkei 225

    29,408.17
    -255.33 (-0.86%)
     

Is Valero Energy Corporation (NYSE:VLO) Popular Amongst Institutions?

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·4 min read
  • Oops!
    Something went wrong.
    Please try again later.

If you want to know who really controls Valero Energy Corporation (NYSE:VLO), 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.

Valero Energy has a market capitalization of US$23b, so it's too big to fly under the radar. We'd expect to see both institutions and retail investors owning a portion of the company. Taking a look at our data on the ownership groups (below), it seems that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Valero Energy.

See our latest analysis for Valero Energy

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Valero Energy?

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.

Valero Energy 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. 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 Valero Energy's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
earnings-and-revenue-growth

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 Valero Energy. The Vanguard Group, Inc. is currently the company's largest shareholder with 10% of shares outstanding. With 8.5% and 5.9% of the shares outstanding respectively, BlackRock, Inc. and State Street Global Advisors, Inc. are the second and third largest shareholders.

A closer look at our ownership figures suggests that the top 25 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Valero Energy

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that Valero Energy Corporation insiders own under 1% of the company. 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$79m worth of shares. Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public holds a 22% stake in Valero Energy. 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. To that end, you should learn about the 4 warning signs we've spotted with Valero Energy (including 1 which is concerning) .

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.

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. 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.

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