In the wake of Flight Centre Travel Group Limited’s (ASX:FLT) latest AU$183m market cap drop, institutional owners may be forced to take severe actions

Key Insights

If you want to know who really controls Flight Centre Travel Group Limited (ASX:FLT), then you’ll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 43% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And institutional investors endured the highest losses after the company’s share price fell by 4.2% last week. The recent loss, which adds to a one-year loss of 11% for stockholders, may not sit well with this group of investors. Institutions or “liquidity providers” control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. Hence, if weakness in Flight Centre Travel Group’s share price continues, institutional investors may feel compelled to sell the stock, which might not be ideal for individual investors.

Let’s delve deeper into each type of owner of Flight Centre Travel Group, beginning with the chart below.

View our latest analysis for Flight Centre Travel Group

What Does The Institutional Ownership Tell Us About Flight Centre Travel Group?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Flight Centre Travel Group. 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. 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 Flight Centre Travel Group’s earnings history below. Of course, the future is what really matters.

Flight Centre Travel Group is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Graham Turner with 7.6% of shares outstanding. With 6.9% and 6.1% of the shares outstanding respectively, Bennelong Funds Management Group Pty Ltd and State Street Global Advisors, Inc. are the second and third largest shareholders.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

Story continues

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Flight Centre Travel Group

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

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Flight Centre Travel Group Limited. Insiders own AU$553m worth of shares in the AU$4.2b company. That’s quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public– including retail investors — own 37% stake in the company, and hence can’t easily be ignored. 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.

Private Company Ownership

It seems that Private Companies own 4.9%, of the Flight Centre Travel Group stock. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Flight Centre Travel Group better, we need to consider many other factors.

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.

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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.