Retail investors who have a significant stake must be disappointed along with institutions after Archer Limited's (OB:ARCH) market cap dropped by kr240m

Key Insights

• The considerable ownership by retail investors in Archer indicates that they collectively have a greater say in management and business strategy
• The top 14 shareholders own 49% of the company
• 24% of Archer is held by Institutions

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

If you want to know who really controls Archer Limited (OB:ARCH), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 11% decrease in the stock price last week, retail investors suffered the most losses, but institutions who own 24% stock also took a hit.

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

Check out our latest analysis for Archer

What Does The Institutional Ownership Tell Us About Archer?

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.

As you can see, institutional investors have a fair amount of stake in Archer. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Archer, (below). Of course, keep in mind that there are other factors to consider, too.

It would appear that 7.5% of Archer shares are controlled by hedge funds. 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. Greenwich Holdings Ltd. is currently the largest shareholder, with 17% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 7.5%, of the shares outstanding, respectively.

Our studies suggest that the top 14 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Archer

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

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 Archer Limited in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. It appears that the board holds about kr5.0m worth of stock. This compares to a market capitalization of kr2.0b. 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 51% of Archer. 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.

Private Company Ownership

We can see that Private Companies own 17%, of the shares on issue. 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 Archer better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Archer you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.