Individual investors who hold 60% of Berkeley Energia Limited (ASX:BKY) gained 11%, institutions profited as well

Key Insights

• Significant control over Berkeley Energia by individual investors implies that the general public has more power to influence management and governance-related decisions
• 40% of the business is held by the top 23 shareholders
• 36% of Berkeley Energia is held by Institutions

To get a sense of who is truly in control of Berkeley Energia Limited (ASX:BKY), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 60% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors gained the most after market cap touched AU$167m last week, while institutions who own 36% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about Berkeley Energia.

See our latest analysis for Berkeley Energia

What Does The Institutional Ownership Tell Us About Berkeley Energia?

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.

Berkeley Energia already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Berkeley Energia's earnings history below. Of course, the future is what really matters.

Berkeley Energia is not owned by hedge funds. Paradice Investment Management Pty Ltd. is currently the largest shareholder, with 9.9% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.1% and 6.4%, of the shares outstanding, respectively. In addition, we found that Robert Behets, the CEO has 0.6% of the shares allocated to their name.

Our studies suggest that the top 23 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Berkeley Energia

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can see that insiders own shares in Berkeley Energia Limited. As individuals, the insiders collectively own AU$7.2m worth of the AU$167m company. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public -- including retail investors -- own 60% of Berkeley Energia. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Berkeley Energia 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.

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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.