Yahoo Finance Both retail investors who control a good portion of Berkeley Energia Limited (ASX:BKY) along with institutions must be dismayed after last week's 13% decrease
Key Insights
Berkeley Energia's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
41% of the business is held by the top 23 shareholders
To get a sense of who is truly in control of Berkeley Energia Limited (ASX:BKY), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
While institutions who own 37% came under pressure after market cap dropped to AU$152m last week,retail investors took the most losses.
Let's delve deeper into each type of owner of Berkeley Energia, beginning with the chart below.
View our latest analysis for Berkeley Energia
What Does The Institutional Ownership Tell Us About Berkeley Energia?
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.
Berkeley Energia 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 Berkeley Energia, (below). Of course, keep in mind that there are other factors to consider, too.
Berkeley Energia is not owned by hedge funds. Paradice Investment Management Pty Ltd. is currently the largest shareholder, with 9.9% of shares outstanding. For context, the second largest shareholder holds about 8.2% of the shares outstanding, followed by an ownership of 6.4% by the third-largest shareholder. Furthermore, CEO Robert Behets is the owner of 0.6% of the company's shares.
A deeper look at our ownership data shows that the top 23 shareholders collectively hold less than half of the register, suggesting a large group of small holders where 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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Berkeley Energia
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.
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 Berkeley Energia Limited. In their own names, insiders own AU$6.5m worth of stock in the AU$152m company. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 59% of Berkeley Energia 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with Berkeley Energia .
Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.
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.
