- United States
- Oil and Gas
Institutional investors may overlook Hallador Energy Company's (NASDAQ:HNRG) recent US$38m market cap drop as long-term gains remain positive
- Institutions' substantial holdings in Hallador Energy implies that they have significant influence over the company's share price
- A total of 11 investors have a majority stake in the company with 50% ownership
- Insider ownership in Hallador Energy is 15%
To get a sense of who is truly in control of Hallador Energy Company (NASDAQ:HNRG), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 38% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Institutional investors was the group most impacted after the company's market cap fell to US$231m last week. Still, the 90% one-year gains may have helped mitigate their overall losses. But they would probably be wary of future losses.
Let's delve deeper into each type of owner of Hallador Energy, beginning with the chart below.
Check out our latest analysis for Hallador Energy
What Does The Institutional Ownership Tell Us About Hallador Energy?
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.
As you can see, institutional investors have a fair amount of stake in Hallador Energy. 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. 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 Hallador Energy's historic earnings and revenue below, but keep in mind there's always more to the story.
Hallador Energy is not owned by hedge funds. The company's largest shareholder is Lubar & Co., Inc., with ownership of 12%. With 6.9% and 6.1% of the shares outstanding respectively, Aegis Financial Corporation and Hallador Investment Advisors Inc. are the second and third largest shareholders. Additionally, the company's CEO Brent Bilsland directly holds 5.1% of the total shares outstanding.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Hallador Energy
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
It seems insiders own a significant proportion of Hallador Energy Company. It has a market capitalization of just US$231m, and insiders have US$34m worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 35% 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 Equity Ownership
Private equity firms hold a 12% stake in Hallador Energy. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Hallador Energy (at least 1 which can't be ignored) , and understanding them should be part of your investment process.
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.
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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.
Hallador Energy Company, through its subsidiaries, engages in the production of steam coal in the State of Indiana for the electric power generation industry.
Acceptable track record with imperfect balance sheet.