Recent uptick might appease Ardmore Shipping Corporation (NYSE:ASC) institutional owners after losing 4.1% over the past year

By
Simply Wall St
Published
February 17, 2022
NYSE:ASC
Source: Shutterstock

If you want to know who really controls Ardmore Shipping Corporation (NYSE:ASC), then you'll have to look at the makeup of its share registry. We can see that institutions own the lion's share in the company with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Institutional investors would probably welcome last week's 11% increase in share prices after a year of 4.1% losses as a sign that returns are likely to begin trending higher.

In the chart below, we zoom in on the different ownership groups of Ardmore Shipping.

Check out our latest analysis for Ardmore Shipping

ownership-breakdown
NYSE:ASC Ownership Breakdown February 17th 2022

What Does The Institutional Ownership Tell Us About Ardmore Shipping?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Ardmore Shipping does have institutional investors; and they hold a good portion of the company's stock. 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 Ardmore Shipping's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NYSE:ASC Earnings and Revenue Growth February 17th 2022

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Ardmore Shipping is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Private Management Group, Inc. with 8.1% of shares outstanding. Aristotle Capital Boston, LLC is the second largest shareholder owning 7.5% of common stock, and Royce & Associates, LP holds about 5.4% of the company stock.

A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Ardmore Shipping

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. 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 cannot confirm that board members are holding shares personally. Not all jurisdictions have the same rules around disclosing insider ownership, and it is possible we have missed something, here. So you can click here learn more about the CEO.

General Public Ownership

The general public-- including retail investors -- own 41% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

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 1 warning sign with Ardmore Shipping , and understanding them should be part of your investment process.

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.

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