Painful week for individual investors invested in Gulf Keystone Petroleum Limited (LON:GKP) after 13% drop, institutions also suffered losses

Key Insights

• Gulf Keystone Petroleum's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 44% of the company
• Institutions own 27% of Gulf Keystone Petroleum

If you want to know who really controls Gulf Keystone Petroleum Limited (LON:GKP), then you'll have to look at the makeup of its share registry. With 57% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 13% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 27% stock also took a hit.

Let's delve deeper into each type of owner of Gulf Keystone Petroleum, beginning with the chart below.

See our latest analysis for Gulf Keystone Petroleum

What Does The Institutional Ownership Tell Us About Gulf Keystone Petroleum?

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.

Gulf Keystone 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Gulf Keystone Petroleum's historic earnings and revenue below, but keep in mind there's always more to the story.

Our data indicates that hedge funds own 15% of Gulf Keystone Petroleum. 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. Our data shows that Lansdowne Partners Limited is the largest shareholder with 15% of shares outstanding. With 6.1% and 4.7% of the shares outstanding respectively, abrdn plc and Ophorst van Marwijk Kooy Vermogensbeheer N.V. are the second and third largest shareholders.

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

Insider Ownership Of Gulf Keystone Petroleum

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Our data suggests that insiders own under 1% of Gulf Keystone Petroleum Limited in their own names. It seems the board members have no more than UK£1.3m worth of shares in the UK£217m company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public -- including retail investors -- own 57% of Gulf Keystone Petroleum. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Gulf Keystone Petroleum , and understanding them should be part of your investment process.

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.