Painful week for individual investors invested in Genie Energy Ltd. (NYSE:GNE) after 11% drop, institutions also suffered losses

Key Insights

• Genie Energy's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 19 investors have a majority stake in the company with 50% ownership
• Insiders have been selling lately

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Every investor in Genie Energy Ltd. (NYSE:GNE) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 41% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of individual investors took a hit after last week’s 11% price drop, institutions with their 35% holdings also suffered.

In the chart below, we zoom in on the different ownership groups of Genie Energy.

View our latest analysis for Genie Energy

What Does The Institutional Ownership Tell Us About Genie Energy?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Genie Energy. 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. 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 Genie Energy, (below). Of course, keep in mind that there are other factors to consider, too.

Genie Energy is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Howard Jonas with 17% of shares outstanding. For context, the second largest shareholder holds about 4.7% of the shares outstanding, followed by an ownership of 4.2% by the third-largest shareholder. Additionally, the company's CEO Michael Stein directly holds 2.4% of the total shares outstanding.

After doing some more digging, we found that the top 19 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Genie Energy

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Genie Energy Ltd.. Insiders own US$124m worth of shares in the US$579m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Genie Energy. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

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.

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.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.