Private companies among Finder Energy Holdings Limited's (ASX:FDR) largest shareholders, saw gain in holdings value after stock jumped 119% last week

Key Insights

• The considerable ownership by private companies in Finder Energy Holdings indicates that they collectively have a greater say in management and business strategy
• Longreach Capital Investment Pty Ltd owns 50% of the company
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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To get a sense of who is truly in control of Finder Energy Holdings Limited (ASX:FDR), it is important to understand the ownership structure of the business. With 56% stake, private companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies collectively scored the highest last week as the company hit AU$155m market cap following a 119% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Finder Energy Holdings.

View our latest analysis for Finder Energy Holdings

What Does The Institutional Ownership Tell Us About Finder Energy Holdings?

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.

Finder Energy Holdings 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 Finder Energy Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

Finder Energy Holdings is not owned by hedge funds. The company's largest shareholder is Longreach Capital Investment Pty Ltd, with ownership of 50%. This implies that they have majority interest control of the future of the company. In comparison, the second and third largest shareholders hold about 5.7% and 2.4% of the stock. Furthermore, CEO Damon Neaves is the owner of 1.3% of the company's shares.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Finder Energy Holdings

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 Finder Energy Holdings Limited. It has a market capitalization of just AU$155m, and insiders have AU$9.5m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 56%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 Finder Energy Holdings is showing 5 warning signs in our investment analysis , and 4 of those are concerning...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.