Private companies who have a significant stake must be disappointed along with institutions after SRT Marine Systems plc's (LON:SRT) market cap dropped by UK£12m

Key Insights

• SRT Marine Systems' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 7 shareholders own 52% of the company
• Insider ownership in SRT Marine Systems is 24%

A look at the shareholders of SRT Marine Systems plc (LON:SRT) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 31% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While institutions, who own 26% shares weren’t spared from last week’s UK£12m market cap drop, private companies as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of SRT Marine Systems.

View our latest analysis for SRT Marine Systems

What Does The Institutional Ownership Tell Us About SRT Marine Systems?

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.

SRT Marine Systems 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 SRT Marine Systems' historic earnings and revenue below, but keep in mind there's always more to the story.

SRT Marine Systems is not owned by hedge funds. Ocean Infinity Ltd. is currently the company's largest shareholder with 15% of shares outstanding. In comparison, the second and third largest shareholders hold about 15% and 5.4% of the stock. Simon Rogers, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Furthermore, CEO Simon Tucker is the owner of 1.2% of the company's shares.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of SRT Marine Systems

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our most recent data indicates that insiders own a reasonable proportion of SRT Marine Systems plc. Insiders own UK£25m worth of shares in the UK£102m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 19% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 31%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand SRT Marine Systems better, we need to consider many other factors. For instance, we've identified 3 warning signs for SRT Marine Systems (1 can't be ignored) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.