Murphy Oil Corporation (NYSE:MUR) is largely controlled by institutional shareholders who own 79% of the company – Simply Wall St

Key ideas

• Institutions’ substantial stakes in Murphy Oil imply that they have significant influence over the company’s stock price.
• A total of 15 investors hold a majority stake in the company with a 51% stake.
• Insiders have been selling lately

If you want to know who really controls Murphy Oil Corporation (NYSE:MUR), then you’ll need to look at the makeup of its share registry. The group holding the largest number of shares in the company, around 79% to be precise, are institutions. In other words, this is the group that will gain the most (or lose the most) from their investment in the business.

Since institutional investors have access to enormous amounts of capital, their market movements tend to be subject to intense scrutiny from retail or individual investors. As a result, a significant institutional amount invested in a company is generally considered a positive attribute.

Let’s take a closer look at what different types of shareholders can tell us about Murphy Oil.

Check out our latest analysis for Murphy Oil

What does institutional ownership tell us about Murphy Oil?

Institutions typically measure themselves against a benchmark when reporting to their own investors. So they often become more enthusiastic about a stock once it is included in a major index. We expect most companies to have some institutions on the register, especially if they are growing.

Murphy Oil already has institutions listed on the share registry. Indeed, they own a respectable stake in the company. This suggests a certain credibility among professional investors. But we can’t rely on that fact alone, because institutions make bad investments sometimes, just like everyone else. When multiple institutions own a stock, there is always a risk that they will end up in a ‘crowded trade’. When such a trade goes bad, multiple parties may compete to sell their shares quickly. This risk is higher in a company without a history of growth. You can see Murphy Oil’s historic earnings and revenue below, but keep in mind there’s always more to the story.

Since institutional investors own more than half of the issued shares, the board will likely need to pay attention to their preferences. Hedge funds don’t own much stock in Murphy Oil. BlackRock, Inc. is currently the largest shareholder, with 13% of shares outstanding. Meanwhile, the second and third largest shareholders hold 11% and 5.2% of the outstanding shares, respectively. Additionally, the company’s CEO Roger Jenkins directly owns 0.7% of the total shares outstanding.

Looking at the shareholder register, we can see that 51% of the ownership is controlled by the top 15 shareholders, meaning that no single shareholder has a majority stake in the ownership.

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 interesting to see their forecasts as well.

Murphy Oil Insider Ownership

The definition of an insider may differ slightly between countries, but board members still count. Management ultimately answers to the board of directors. However, it is not uncommon for managers to be board members, especially if they are a founder or CEO.

Internal ownership is positive when it indicates that management thinks like the true owners of the company. However, strong internal ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

We can see that insiders own shares in Murphy Oil Corporation. This is a fairly large company, so it’s generally positive to see potentially meaningful alignment. In this case, they own about $398 million worth of stock (at current prices). It’s good to see this level of investment from insiders. You can check here to see if these insiders have bought recently.

General public property

With a 15% stake, the general public, made up primarily of individual investors, has some influence over Murphy Oil. While this group can’t necessarily call the shots, they can certainly have a real influence on how the company is run.

Next steps:

I find it very interesting to know who exactly owns a company. But to really understand better, we need to consider other information as well. To this end, you must be aware of the 2 warning signs we spotted with Murphy Oil.

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

NB: The figures in this article are calculated using data for the last twelve months, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the entire year.

Any feedback on this article? Worried about the content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.