If you want to know who really controls Petrel Resources Plc (LON:PET), then you’ll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.
Petrel Resources is not a large company by global standards. It has a market capitalization of UK£18m, which means it wouldn’t have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutional investors have not yet purchased shares. Let’s delve deeper into each type of owner, to discover more about Petrel Resources.
Check out our latest analysis for Petrel Resources
What Does The Lack Of Institutional Ownership Tell Us About Petrel Resources?
Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Petrel Resources might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
Petrel Resources is not owned by hedge funds. Roger Tamraz is currently the largest shareholder, with 6.9% of shares outstanding. With 2.5% and 2.0% of the shares outstanding respectively, John Teeling and David Horgan are the second and third largest shareholders. Note that they are also Top Key Executive and Member of the Board of Directors, respectively, meaning that the company’s top shareholders are insiders.
A deeper look at our ownership data shows that the top 4 shareholders collectively hold less than 50% of the register, suggesting a large group of small holders where no one share holder has a majority.
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. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Petrel Resources
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.
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.
It seems insiders own a significant proportion of Petrel Resources Plc. Insiders own UK£2.2m worth of shares in the UK£18m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public, who are mostly retail investors, collectively hold 88% of Petrel Resources shares. This size of ownership gives retail investors collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Next Steps:
It’s always worth thinking about the different groups who own shares in a company. But to understand Petrel Resources better, we need to consider many other factors. Take risks, for example – Petrel Resources has 5 warning signs (and 2 which don’t sit too well with us) we think you should know about.
Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.