Can We See Significant Institutional Ownership On The CVR Energy Inc (NYSE:CVI) Share Register?

Every investor in CVR Energy Inc (NYSE:CVI) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that used to be publicly owned tend to have lower insider ownership.

CVR Energy has a market capitalization of US$4.0b, so it’s too big to fly under the radar. We’d expect to see both institutions and retail investors owning a portion of the company. In the chart below below, we can see that institutions are noticeable on the share registry. Let’s delve deeper into each type of owner, to discover more about CVI.

See our latest analysis for CVR Energy

NYSE:CVI Ownership Summary November 8th 18
NYSE:CVI Ownership Summary November 8th 18

What Does The Institutional Ownership Tell Us About CVR Energy?

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.

As you can see, institutional investors own 87% of CVR Energy. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 CVR Energy’s historic earnings and revenue, below, but keep in mind there’s always more to the story.

NYSE:CVI Income Statement Export November 8th 18
NYSE:CVI Income Statement Export November 8th 18

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don’t have many shares in CVR Energy. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of CVR 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. 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 most recent data indicates that insiders own less than 1% of CVR Energy Inc. It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own US$40 worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, with a 13% stake in the company, will not 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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.