Star Bulk Carriers Corp.'s (NASDAQ:SBLK) market cap dropped US$166m last week; individual investors who hold 58% were hit as were institutions

Key Insights

• Significant control over Star Bulk Carriers by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 33% of the company
• 37% of Star Bulk Carriers is held by Institutions

To get a sense of who is truly in control of Star Bulk Carriers Corp. (NASDAQ:SBLK), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 58% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions, who own 37% shares weren’t spared from last week’s US$166m market cap drop, individual investors as a group suffered the maximum losses

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

View our latest analysis for Star Bulk Carriers

What Does The Institutional Ownership Tell Us About Star Bulk Carriers?

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.

Star Bulk Carriers already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Star Bulk Carriers, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Star Bulk Carriers. Looking at our data, we can see that the largest shareholder is AllianceBernstein L.P. with 4.7% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.6% and 3.5% of the stock. Petros Pappas, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Star Bulk Carriers

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.

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.

We can see that insiders own shares in Star Bulk Carriers Corp.. This is a big company, so it is good to see this level of alignment. Insiders own US$84m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 58% of Star Bulk Carriers shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Star Bulk Carriers better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Star Bulk Carriers you should be aware of.

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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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com