Institutional investors are PowerHouse Energy Group Plc's (LON:PHE) biggest bettors and were rewarded after last week's UK£27m market cap gain

Key Insights

• Institutions' substantial holdings in PowerHouse Energy Group implies that they have significant influence over the company's share price
• A total of 16 investors have a majority stake in the company with 50% ownership
• Insider ownership in PowerHouse Energy Group is 20%

If you want to know who really controls PowerHouse Energy Group Plc (LON:PHE), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 41% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, institutional investors ended up benefitting the most after the company hit UK£80m in market cap. One-year return to shareholders is currently 195% and last week’s gain was the icing on the cake.

In the chart below, we zoom in on the different ownership groups of PowerHouse Energy Group.

Check out our latest analysis for PowerHouse Energy Group

What Does The Institutional Ownership Tell Us About PowerHouse Energy Group?

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.

PowerHouse Energy Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of PowerHouse Energy Group, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in PowerHouse Energy Group. Josh White is currently the company's largest shareholder with 7.4% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.2% and 4.6%, of the shares outstanding, respectively.

A closer look at our ownership figures suggests that the top 16 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of PowerHouse Energy Group

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own a reasonable proportion of PowerHouse Energy Group Plc. Insiders own UK£16m worth of shares in the UK£80m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in PowerHouse Energy Group. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand PowerHouse Energy Group better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with PowerHouse Energy Group (at least 3 which are potentially serious) , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.