Australia markets close in 5 hours 14 minutes
  • ALL ORDS

    6,789.50
    +129.70 (+1.95%)
     
  • ASX 200

    6,585.70
    +123.70 (+1.91%)
     
  • AUD/USD

    0.6491
    -0.0033 (-0.50%)
     
  • OIL

    81.72
    -0.43 (-0.52%)
     
  • GOLD

    1,662.00
    -8.00 (-0.48%)
     
  • BTC-AUD

    29,929.80
    +261.65 (+0.88%)
     
  • CMC Crypto 200

    443.86
    +15.08 (+3.52%)
     
  • AUD/EUR

    0.6691
    +0.0000 (+0.00%)
     
  • AUD/NZD

    1.1378
    -0.0003 (-0.03%)
     
  • NZX 50

    11,261.93
    +142.36 (+1.28%)
     
  • NASDAQ

    11,493.83
    +222.08 (+1.97%)
     
  • FTSE

    7,005.39
    +20.80 (+0.30%)
     
  • Dow Jones

    29,683.74
    +548.75 (+1.88%)
     
  • DAX

    12,183.28
    +43.60 (+0.36%)
     
  • Hang Seng

    17,250.88
    -609.43 (-3.41%)
     
  • NIKKEI 225

    26,415.37
    +241.39 (+0.92%)
     

Are Institutions Heavily Invested In Trinity Industries, Inc.'s (NYSE:TRN) Shares?

·4-min read

A look at the shareholders of Trinity Industries, Inc. (NYSE:TRN) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that have been privatized tend to have low insider ownership.

With a market capitalization of US$2.2b, Trinity Industries is a decent size, so it is probably on the radar of institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Trinity Industries.

View our latest analysis for Trinity Industries

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Trinity Industries?

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.

As you can see, institutional investors have a fair amount of stake in Trinity Industries. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Trinity Industries' historic earnings and revenue below, but keep in mind there's always more to the story.

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

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 Trinity Industries. Looking at our data, we can see that the largest shareholder is Capital Research and Management Company with 16% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 10.0%, of the shares outstanding, respectively.

We did some more digging and found that 6 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Trinity Industries

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own some shares in Trinity Industries, Inc.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$29m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 13% 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with Trinity Industries (at least 2 which don't sit too well with us) , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

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.