Stock Analysis

Retail investors invested in Imperial Petroleum Inc. (NASDAQ:IMPP) copped the brunt of last week's US$15m market cap decline

NasdaqCM:IMPP
Source: Shutterstock

Key Insights

  • Significant control over Imperial Petroleum by retail investors implies that the general public has more power to influence management and governance-related decisions
  • 48% of the business is held by the top 25 shareholders
  • Insiders own 11% of Imperial Petroleum

If you want to know who really controls Imperial Petroleum Inc. (NASDAQ:IMPP), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, retail investors endured the biggest losses as the stock fell by 12%.

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

See our latest analysis for Imperial Petroleum

ownership-breakdown
NasdaqCM:IMPP Ownership Breakdown June 10th 2024

What Does The Institutional Ownership Tell Us About Imperial 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.

Since institutions own only a small portion of Imperial Petroleum, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

earnings-and-revenue-growth
NasdaqCM:IMPP Earnings and Revenue Growth June 10th 2024

We note that hedge funds don't have a meaningful investment in Imperial Petroleum. Looking at our data, we can see that the largest shareholder is Flawless Management,Inc with 24% of shares outstanding. Harry Vafias is the second largest shareholder owning 9.6% of common stock, and Arethusa Properties Ltd. holds about 9.1% of the company stock. Harry Vafias, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

Our studies suggest that the top 25 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 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Imperial 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Imperial Petroleum Inc.. Insiders have a US$12m stake in this US$108m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public -- including retail investors -- own 52% of Imperial Petroleum. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

It seems that Private Companies own 33%, of the Imperial Petroleum stock. 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. Take risks for example - Imperial Petroleum has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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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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.

About NasdaqCM:IMPP

Imperial Petroleum

Provides international seaborne transportation services to oil producers, refineries, and commodities traders.

Flawless balance sheet and undervalued.

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