Every investor in Vulcan Energy Resources Limited (ASX:VUL) should know the most powerful shareholder groups. With a 57% stake, individual investors hold the most shares in the company. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).
After a 9.5% drop in the share price last week, individual investors suffered the most losses, but insiders who own 23% of the shares were also affected.
In the table below, we zoom in on the different ownership groups of Vulcan Energy Resources.
See our latest analysis for Vulcan Energy Resources
What does institutional ownership tell us about Vulcan’s energy resources?
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.
We can see that Vulcan Energy Resources has institutional investors; and they own a good part of the shares of the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. It is therefore worth checking the past earnings trajectory of Vulcan Energy Resources (below). Of course, keep in mind that there are other factors to consider as well.
We note that hedge funds have no significant investment in Vulcan Energy Resources. The company’s CEO, Francis Edward Wedin, is the largest shareholder with 13% of the outstanding shares. In comparison, the second and third shareholders hold approximately 5.8% and 5.6% of the shares.
A closer look at our ownership data shows that the top 25 shareholders collectively own less than half of the ledger, suggesting a large group of small shareholders where no single shareholder has a majority.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.
Insider ownership of Vulcan Energy Resources
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
It appears that insiders own a large share of Vulcan Energy Resources Limited. It has a market capitalization of just A$1.2 billion and insiders hold A$275 million worth of shares in their own names. It’s great to see insiders so invested in the company. It might be worth checking to see if these insiders have bought recently.
General public property
The general public, including retail investors, owns 57% of Vulcan Energy Resources. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Private Company Ownership
It appears that private companies hold 11% of the shares of Vulcan Energy Resources. It’s hard to draw conclusions from this fact alone, so it’s worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.
It is always useful to think about the different groups that own shares in a company. But to better understand Vulcan Energy Resources, we need to consider many other factors. For example, we have identified 6 warning signs for Vulcan Energy Resources (2 are significant) that you should be aware of.
But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.
NB: The figures in this article are calculated using trailing twelve month data, 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 full year.
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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 be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.