While institutions invested in Berkeley Energia Limited (ASX:BKY) benefited from last week's 28% gain, retail investors stood to gain the most

Key Insights

• Significant control over Berkeley Energia by retail investors implies that the general public has more power to influence management and governance-related decisions
• 43% of the business is held by the top 19 shareholders
• 31% 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. And the group that holds the biggest piece of the pie are retail investors with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 28% increase in the stock price last week, retail investors profited the most, but institutions who own 31% stock also stood to gain from the increase.

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

View 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. 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 Berkeley Energia's historic earnings and revenue below, but keep in mind there's always more to the story.

Berkeley Energia is not owned by hedge funds. Paradice Investment Management Pty Ltd. is currently the company's largest shareholder with 9.9% of shares outstanding. For context, the second largest shareholder holds about 8.2% of the shares outstanding, followed by an ownership of 6.4% by the third-largest shareholder. Additionally, the company's CEO Robert Behets directly holds 0.6% of the total shares outstanding.

Our studies suggest that the top 19 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 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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Berkeley Energia

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 report that insiders do own shares in Berkeley Energia Limited. As individuals, the insiders collectively own AU$9.0m worth of the AU$212m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 57% of Berkeley Energia. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Public Company Ownership

We can see that public companies hold 8.2% of the Berkeley Energia shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Berkeley Energia better, we need to consider many other factors. For example, we've discovered 2 warning signs for Berkeley Energia (1 shouldn't be ignored!) that you should be aware of before investing here.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.