Institutional investors may adopt severe steps after Jadestone Energy plc's (LON:JSE) latest 31% drop adds to a year losses

Key Insights

• Given the large stake in the stock by institutions, Jadestone Energy's stock price might be vulnerable to their trading decisions
• A total of 5 investors have a majority stake in the company with 50% ownership
• Insiders have been buying lately

A look at the shareholders of Jadestone Energy plc (LON:JSE) can tell us which group is most powerful. With 49% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And so it follows that institutional investors was the group most impacted after the company's market cap fell to UK£124m last week after a 31% drop in the share price. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 76% might not go down well especially with this category of shareholders. Institutions or "liquidity providers" control large sums of money and therefore, these types of investors usually have a lot of influence over stock price movements. Hence, if weakness in Jadestone Energy's share price continues, institutional investors may feel compelled to sell the stock, which might not be ideal for individual investors.

Let's take a closer look to see what the different types of shareholders can tell us about Jadestone Energy.

View our latest analysis for Jadestone Energy

What Does The Institutional Ownership Tell Us About Jadestone 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.

We can see that Jadestone Energy 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 Jadestone Energy's earnings history below. Of course, the future is what really matters.

Our data indicates that hedge funds own 34% of Jadestone Energy. 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. Tyrus Capital S.A.M. is currently the company's largest shareholder with 22% of shares outstanding. For context, the second largest shareholder holds about 9.6% of the shares outstanding, followed by an ownership of 7.2% by the third-largest shareholder. In addition, we found that Alexander Paul Blakeley, the CEO has 0.8% of the shares allocated to their name.

On looking further, we found that 50% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Jadestone Energy

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. 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.

We can see that insiders own shares in Jadestone Energy plc. As individuals, the insiders collectively own UK£1.3m worth of the UK£124m company. This shows at least some alignment, but we usually like to see larger insider holdings. 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 16% stake in Jadestone Energy. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Jadestone Energy has 3 warning signs (and 1 which is a bit concerning) we think you should know about.

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.