Stock Analysis

Aker Carbon Capture ASA's (OB:ACC) last week's 6.9% decline must have disappointed private companies who have a significant stake

OB:ACC
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Key Insights

  • Significant control over Aker Carbon Capture by private companies implies that the general public has more power to influence management and governance-related decisions
  • The top 5 shareholders own 52% of the company
  • Institutions own 22% of Aker Carbon Capture

To get a sense of who is truly in control of Aker Carbon Capture ASA (OB:ACC), it is important to understand the ownership structure of the business. With 43% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 6.9%.

In the chart below, we zoom in on the different ownership groups of Aker Carbon Capture.

Check out our latest analysis for Aker Carbon Capture

ownership-breakdown
OB:ACC Ownership Breakdown July 10th 2023

What Does The Institutional Ownership Tell Us About Aker Carbon Capture?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Aker Carbon Capture already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Aker Carbon Capture's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
OB:ACC Earnings and Revenue Growth July 10th 2023

We note that hedge funds don't have a meaningful investment in Aker Carbon Capture. The Resource Group Trg As is currently the company's largest shareholder with 43% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 2.4% and 2.3%, of the shares outstanding, respectively.

On looking further, we found that 52% 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.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Aker Carbon Capture

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that Aker Carbon Capture ASA insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It has a market capitalization of just kr8.0b, and the board has only kr5.1m worth of shares in their own names. 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, who are usually individual investors, hold a 35% stake in Aker Carbon Capture. 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 43%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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. Be aware that Aker Carbon Capture is showing 1 warning sign in our investment analysis , you should know about...

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

Valuation is complex, but we're helping make it simple.

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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.