With 46% ownership in Rockhopper Exploration plc (LON:RKH), institutional investors have a lot riding on the business

Key Insights

• Institutions' substantial holdings in Rockhopper Exploration implies that they have significant influence over the company's share price
• 46% of the business is held by the top 25 shareholders
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

A look at the shareholders of Rockhopper Exploration plc (LON:RKH) can tell us which group is most powerful. The group holding the most number of shares in the company, around 46% to be precise, is institutions. 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£247m in market cap. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 197%.

In the chart below, we zoom in on the different ownership groups of Rockhopper Exploration.

Check out our latest analysis for Rockhopper Exploration

What Does The Institutional Ownership Tell Us About Rockhopper Exploration?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Rockhopper Exploration does have institutional investors; and they hold a good portion of the company's stock. 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.

It looks like hedge funds own 7.7% of Rockhopper Exploration shares. 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. Looking at our data, we can see that the largest shareholder is SRM Advisors (Monaco) SAM 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. In addition, we found that Samuel Moody, the CEO has 0.7% of the shares allocated to their name.

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.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Rockhopper Exploration

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.

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 information suggests that Rockhopper Exploration plc insiders own under 1% of the company. It has a market capitalization of just UK£247m, and the board has only UK£1.9m worth of shares in their own names. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 44% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Rockhopper Exploration. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 4 warning signs for Rockhopper Exploration (3 shouldn't be ignored) that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.