Individual investors among Frontera Energy Corporation's (TSE:FEC) largest shareholders, saw gain in holdings value after stock jumped 8.6% last week

Key Insights

• The considerable ownership by individual investors in Frontera Energy indicates that they collectively have a greater say in management and business strategy
• The top 3 shareholders own 52% of the company
• Recent sales by insiders

If you want to know who really controls Frontera Energy Corporation (TSE:FEC), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 42% to be precise, is individual investors. 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, individual investors collectively scored the highest last week as the company hit CA$927m market cap following a 8.6% gain in the stock.

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

Check out our latest analysis for Frontera Energy

What Does The Institutional Ownership Tell Us About Frontera 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.

As you can see, institutional investors have a fair amount of stake in Frontera Energy. 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. 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 Frontera Energy's earnings history below. Of course, the future is what really matters.

It would appear that 8.9% of Frontera Energy shares are controlled by hedge funds. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Looking at our data, we can see that the largest shareholder is The Catalyst Capital Group Inc. with 41% of shares outstanding. Gramercy Funds Management LLC is the second largest shareholder owning 8.9% of common stock, and San Bernardino County Employees' Retirement Association holds about 2.9% of the company stock.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Frontera Energy

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 less than 1% of Frontera Energy Corporation. It appears that the board holds about CA$1.7m worth of stock. This compares to a market capitalization of CA$927m. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 42% stake in Frontera 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.

Private Equity Ownership

Private equity firms hold a 41% stake in Frontera Energy. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Frontera Energy better, we need to consider many other factors. Take risks for example - Frontera Energy has 2 warning signs we think you should be aware of.

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.