Rockhopper Exploration plc's (LON:RKH) large institutional owners must be happy as stock continues to impress, up 17% over the past week

Key Insights

• Significantly high institutional ownership implies Rockhopper Exploration's stock price is sensitive to their trading actions
• The top 25 shareholders own 46% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Rockhopper Exploration plc (LON:RKH), then you'll have to look at the makeup of its share registry. With 46% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Last week’s 17% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 36%.

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

Check out our latest analysis for Rockhopper Exploration

What Does The Institutional Ownership Tell Us About Rockhopper Exploration?

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 Rockhopper Exploration. 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. 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 Rockhopper Exploration's earnings history below. Of course, the future is what really matters.

Our data indicates that hedge funds own 7.7% of Rockhopper Exploration. 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. SRM Advisors (Monaco) SAM is currently the largest shareholder, with 7.7% of shares outstanding. With 7.6% and 5.5% of the shares outstanding respectively, HBOS Investment Fund Managers Limited and Barclays Bank PLC, Wealth and Investment Management Division are the second and third largest shareholders. Furthermore, CEO Samuel Moody is the owner of 0.7% of the company's shares.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where 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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Rockhopper Exploration

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Our most recent data indicates that insiders own less than 1% of Rockhopper Exploration plc. It has a market capitalization of just UK£101m, and the board has only UK£791k worth of shares in their own names. 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-- including retail investors -- own 45% stake in the company, and hence can't easily be ignored. 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:

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 Rockhopper Exploration you should be aware of, and 2 of them don't sit too well with us.

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.