Yahoo Finance Clean Energy Fuels Corp.'s (NASDAQ:CLNE) recent 10% pullback adds to one-year year losses, institutional owners may take drastic measures
Key Insights
Given the large stake in the stock by institutions, Clean Energy Fuels' stock price might be vulnerable to their trading decisions
The top 25 shareholders own 43% of the company
Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
A look at the shareholders of Clean Energy Fuels Corp. (NASDAQ:CLNE) can tell us which group is most powerful. The group holding the most number of shares in the company, around 51% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And institutional investors saw their holdings value drop by 10% last week. Needless to say, the recent loss which further adds to the one-year loss to shareholders of 44% might not go down well especially with this category of shareholders. Also referred to as "smart money", institutions have a lot of sway over how a stock's price moves. As a result, if the decline continues, institutional investors may be pressured to sell Clean Energy Fuels which might hurt individual investors.
In the chart below, we zoom in on the different ownership groups of Clean Energy Fuels.
See our latest analysis for Clean Energy Fuels
What Does The Institutional Ownership Tell Us About Clean Energy Fuels?
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.
We can see that Clean Energy Fuels does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Clean Energy Fuels' historic earnings and revenue below, but keep in mind there's always more to the story.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in Clean Energy Fuels. Our data shows that Grantham Mayo Van Otterloo & Co. LLC is the largest shareholder with 7.8% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 6.5% of common stock, and Dimensional Fund Advisors LP holds about 5.0% of the company stock. Furthermore, CEO Andrew Littlefair is the owner of 0.6% of the company's shares.
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.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Clean Energy Fuels
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.
Shareholders would probably be interested to learn that insiders own shares in Clean Energy Fuels Corp.. As individuals, the insiders collectively own US$9.9m worth of the US$560m 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
With a 47% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Clean Energy Fuels. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Clean Energy Fuels better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Clean Energy Fuels you should know about.
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.
