What Kind Of Shareholders Own Bahamas Petroleum Company plc (LON:BPC)?

By
Simply Wall St
Published
August 10, 2020
AIM:BPC

Every investor in Bahamas Petroleum Company plc (LON:BPC) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.

Bahamas Petroleum is a smaller company with a market capitalization of UK£91m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's take a closer look to see what the different types of shareholder can tell us about Bahamas Petroleum.

View our latest analysis for Bahamas Petroleum

ownership-breakdown
AIM:BPC Ownership Breakdown August 10th 2020

What Does The Institutional Ownership Tell Us About Bahamas Petroleum?

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.

Bahamas Petroleum 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. 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 Bahamas Petroleum, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
AIM:BPC Earnings and Revenue Growth August 10th 2020

Hedge funds don't have many shares in Bahamas Petroleum. Our data shows that Standard Life Aberdeen plc is the largest shareholder with 7.2% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.3% and 4.2% of the stock.

On studying our ownership data, we found that 12 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Bahamas Petroleum

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.

We can see that insiders own shares in Bahamas Petroleum Company plc. It has a market capitalization of just UK£91m, and insiders have UK£2.6m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public -- mostly retail investors -- own 54% of Bahamas Petroleum. With this size of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Bahamas Petroleum better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Bahamas Petroleum you should be aware of, and 1 of them is potentially serious.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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. 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.
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