Insiders at Gold Hydrogen Limited (ASX:GHY) must be dismayed with the latest 10% dip after buying recently

Key Insights

• Significant insider control over Gold Hydrogen implies vested interests in company growth
• A total of 3 investors have a majority stake in the company with 55% ownership
• Insiders have been buying lately

To get a sense of who is truly in control of Gold Hydrogen Limited (ASX:GHY), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 33% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

It's interesting to note that insiders have been buying shares recently. However, with market cap down by AU$24m over the last week, their expectations were far from met.

In the chart below, we zoom in on the different ownership groups of Gold Hydrogen.

See our latest analysis for Gold Hydrogen

What Does The Institutional Ownership Tell Us About Gold Hydrogen?

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.

We can see that Gold Hydrogen does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Gold Hydrogen's earnings history below. Of course, the future is what really matters.

Gold Hydrogen is not owned by hedge funds. Our data shows that Celm Investments Pty Ltd is the largest shareholder with 24% of shares outstanding. In comparison, the second and third largest shareholders hold about 24% and 7.0% of the stock. Neil McDonald, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Gold Hydrogen

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our information suggests that insiders maintain a significant holding in Gold Hydrogen Limited. It has a market capitalization of just AU$208m, and insiders have AU$70m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Gold Hydrogen. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 27%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Gold Hydrogen better, we need to consider many other factors. Be aware that Gold Hydrogen is showing 3 warning signs in our investment analysis , and 1 of those is 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.