Individual investors who hold 33% of Tamboran Resources Corporation (ASX:TBN) gained 15%, insiders profited as well

Key Insights

• Significant control over Tamboran Resources by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 7 shareholders own 53% of the company
• Insiders have been buying lately

Every investor in Tamboran Resources Corporation (ASX:TBN) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 33% 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$384m last week, while insiders who own 23% also benefitted.

In the chart below, we zoom in on the different ownership groups of Tamboran Resources.

Check out our latest analysis for Tamboran Resources

What Does The Institutional Ownership Tell Us About Tamboran Resources?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Tamboran Resources does have institutional investors; and they hold a good portion of the company's stock. 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 Tamboran Resources' historic earnings and revenue below, but keep in mind there's always more to the story.

It looks like hedge funds own 13% of Tamboran Resources shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Our data shows that Bryan Sheffield is the largest shareholder with 15% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 6.0% by the third-largest shareholder.

We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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

Insider Ownership Of Tamboran Resources

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

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Tamboran Resources Corporation. It has a market capitalization of just AU$384m, and insiders have AU$88m 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

The general public, who are usually individual investors, hold a 33% stake in Tamboran Resources. 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

We can see that Private Companies own 5.1%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

It appears to us that public companies own 5.4% of Tamboran Resources. 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:

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. Case in point: We've spotted 4 warning signs for Tamboran Resources you should be aware of, and 1 of them is concerning.

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.