Retail investors among Beach Energy Limited's (ASX:BPT) largest shareholders, saw gain in holdings value after stock jumped 3.2% last week

Key Insights

• Beach Energy's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 7 investors have a majority stake in the company with 50% ownership
• Insiders have been buying lately

To get a sense of who is truly in control of Beach Energy Limited (ASX:BPT), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 42% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, retail investors collectively scored the highest last week as the company hit AU$2.9b market cap following a 3.2% gain in the stock.

Let's delve deeper into each type of owner of Beach Energy, beginning with the chart below.

Check out our latest analysis for Beach Energy

What Does The Institutional Ownership Tell Us About Beach Energy?

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.

Beach Energy already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Beach Energy's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Beach Energy. Seven Group Holdings Limited is currently the largest shareholder, with 30% of shares outstanding. State Street Global Advisors, Inc. is the second largest shareholder owning 4.5% of common stock, and Macquarie Group, Ltd., Banking & Securities Investments holds about 4.4% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Beach Energy

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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.

Our most recent data indicates that insiders own some shares in Beach Energy Limited. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around AU$35m 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

With a 42% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Beach Energy. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

We can see that public companies hold 30% of the Beach Energy shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Beach Energy is showing 1 warning sign in our investment analysis , you should know about...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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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.