Both individual investors who control a good portion of Nordic American Tankers Limited (NYSE:NAT) along with institutions must be dismayed after last week's 12% decrease

Key Insights

• Nordic American Tankers' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 35% ownership
• Institutions own 38% of Nordic American Tankers

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To get a sense of who is truly in control of Nordic American Tankers Limited (NYSE:NAT), it is important to understand the ownership structure of the business. With 58% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 38% came under pressure after market cap dropped to US$498m last week,individual investors took the most losses.

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

Check out our latest analysis for Nordic American Tankers

What Does The Institutional Ownership Tell Us About Nordic American Tankers?

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.

We can see that Nordic American Tankers does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Nordic American Tankers' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Nordic American Tankers. Our data shows that Dimensional Fund Advisors LP is the largest shareholder with 5.6% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 5.6% of common stock, and Morgan Stanley, Investment Banking and Brokerage Investments holds about 2.4% of the company stock. Additionally, the company's CEO Herbjorn Hansson directly holds 2.0% of the total shares outstanding.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Nordic American Tankers

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

We can see that insiders own shares in Nordic American Tankers Limited. In their own names, insiders own US$16m worth of stock in the US$498m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public -- including retail investors -- own 58% of Nordic American Tankers. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Nordic American Tankers better, we need to consider many other factors. For example, we've discovered 2 warning signs for Nordic American Tankers (1 is significant!) that you should be aware of before investing here.

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.

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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.