Yahoo Finance Rockhopper Exploration plc's (LON:RKH) high institutional ownership speaks for itself as stock continues to impress, up 14% over last week
Key Insights
Significantly high institutional ownership implies Rockhopper Exploration's stock price is sensitive to their trading actions
A total of 23 investors have a majority stake in the company with 50% ownership
If you want to know who really controls Rockhopper Exploration plc (LON:RKH), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 53% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And things are looking up for institutional investors after the company gained UK£10m in market cap last week. The one-year return on investment is currently 53% and last week's gain would have been more than welcomed.
Let's take a closer look to see what the different types of shareholders can tell us about Rockhopper Exploration.
View our latest analysis for Rockhopper Exploration
What Does The Institutional Ownership Tell Us About Rockhopper Exploration?
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 Rockhopper Exploration does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Rockhopper Exploration's historic earnings and revenue below, but keep in mind there's always more to the story.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. It looks like hedge funds own 6.5% of Rockhopper Exploration shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Looking at our data, we can see that the largest shareholder is HBOS Investment Fund Managers Limited with 7.9% of shares outstanding. Aedos Advisers (London) LLP is the second largest shareholder owning 6.5% of common stock, and Barclays Bank PLC, Wealth and Investment Management Division holds about 6.1% of the company stock. Furthermore, CEO Samuel Moody is the owner of 0.7% of the company's shares.
A closer look at our ownership figures suggests that the top 23 shareholders have a combined ownership of 50% implying that 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. 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 Rockhopper Exploration
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
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.
Our most recent data indicates that insiders own less than 1% of Rockhopper Exploration plc. It appears that the board holds about UK£738k worth of stock. This compares to a market capitalization of UK£81m. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.
General Public Ownership
The general public-- including retail investors -- own 39% stake in the company, and hence can't easily be ignored. 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 Rockhopper Exploration better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Rockhopper Exploration (including 1 which shouldn't be ignored) .
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.
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