A look at the shareholders of Norwegian Energy Company ASA (OB:NOR) can tell us which group is the most powerful. Insiders often own a large portion of younger, smaller companies, while larger companies tend to have institutions as shareholders. We also tend to see a decline in insider participation in companies that were previously public.
Norwegian Energy has a market capitalization of 9.3 billion kr, so we expect some institutional investors to have taken notice of the stock. Our analysis of company ownership, below, shows that institutional investors have bought the company. Let’s take a closer look at what different types of shareholders can tell us about Norwegian Energy.
See our latest analysis for Norwegian Energy
What does institutional ownership tell us about Norwegian Energy?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.
As you can see, institutional investors own a sizeable share of Norwegian Energy. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Norwegian Energy’s historic earnings and revenue below, but keep in mind there’s always more to tell.
Reportedly, 12% of Norwegian Energy shares are controlled by hedge funds. This is interesting because hedge funds can be very active and militant. Many are looking for medium-term catalysts that will drive the stock price higher. Looking at our data, we can see that the largest shareholder is CQS Investment Management Limited with 12% of the shares outstanding. Meanwhile, the second and third largest shareholders hold 5.7% and 4.9% of the outstanding shares respectively.
Looking at our ownership data, we found that 24 of the major shareholders collectively own less than 50% of the share register, implying that no single individual holds a majority stake.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. Although there is some analyst coverage, the company is probably not widely covered. So it could attract more attention, on the track.
Norwegian Energy Insider Ownership
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our data suggests that insiders hold less than 1% of Norwegian Energy Company ASA in their own name. However, insiders may have an indirect interest through a more complex structure. It appears that the board members have no more than 7.1 million kr of shares in the 9.3 billion kr company. Many investors in small companies prefer to see the board more heavily invested. You can click here to see if these insiders have been buying or selling.
General public property
The general public, including retail investors, owns 59% of Norwegian Energy. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Private Company Ownership
Our data indicates that private companies own 4.4% of the company’s shares. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this must be disclosed in the annual report. Private companies may also have a strategic interest in the company.
It is always useful to think about the different groups that own shares in a company. But to better understand Norwegian Energy, we need to consider many other factors. For example, we found 3 warning signs for Norwegian Energy (1 is significant!) which you should be aware of before investing here.
If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.