Any investor in Savannah Energy PLC (LON:SAVE) should be aware of the most powerful shareholder groups. Big companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. We also tend to see less insider ownership in companies that were previously publicly owned.
With a market cap of £402m, Savannah Energy is a small-cap stock so it may not be familiar to many institutional investors. In the chart below, we see that institutions own shares of the company. Let’s dive deeper into each ownership type to learn more about Savannah Energy.
Check out our latest analysis for Savannah Energy
What Does Institutional Ownership Tell Us About Savannah Energy?
Many institutions measure their performance against an index that approximates the local market. As a result, they tend to pay more attention to companies that are included in major indices.
We can see that Savannah Energy has institutional investors; and they hold a good portion of the company’s stock. This may indicate that the company has a certain level of credibility in the investor community. However, it’s best not to rely on the supposed confirmation that comes from institutional investors. They too are sometimes wrong. It’s not uncommon for the stock price to fall sharply when two large institutional investors attempt to sell a stock at the same time. So, it’s worth reviewing Savannah Energy’s past earnings history (below). Of course, keep in mind that there are other factors to consider as well.
With institutional investors owning more than half of the outstanding shares, the board likely needs to be mindful of their preferences. It looks like hedge funds own 7.3% of Savannah Energy’s stock. This catches my attention because hedge funds sometimes try to influence management or enact changes that create value for shareholders in the short term. The company’s largest shareholder is Ingalls & Snyder LLC with an 8.5% stake. Meanwhile, the second- and third-largest shareholders hold 7.9% and 7.7% of the outstanding shares, respectively. Additionally, the company’s CEO, Andrew Knott, directly owns 3.4% of the total outstanding shares.
Upon closer inspection, we found that the top 7 shareholders own more than half of the company’s shares, suggesting that the interests of the larger shareholders are to some extent balanced by the smaller ones.
While examining a company’s institutional ownership can add value to your research, it’s also a good practice to research analyst recommendations to gain a deeper understanding of a stock’s expected performance. Quite a few analysts cover the stock, so you can easily look at the projected growth.
Insider ownership of Savannah Energy
The definition of corporate insider can be subjective and varies by jurisdiction. Our data reflects individual insiders and captures at least board members. Management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
Insider ownership is positive when it signals leadership thinks like the true owners of the company. However, a high proportion of insiders can give immense power to even a small group within the organization. This can sometimes be negative.
Our latest data shows that insiders own some shares of Savannah Energy PLC. Insiders own shares in the £402million company worth £16million on their own behalf. Some would say this shows the alignment of interests between shareholders and the board. But it might be worth checking to see if those insiders have sold.
General Public Property
The general public, who are typically individual investors, own a 10% stake in Savannah Energy. While this ownership size is substantial, it may not be enough to change company policy if the decision is not aligned with other major shareholders.
Private company property
Our data shows that private companies own 3.6% of the company’s shares. It’s hard to draw any conclusions from this fact alone, so it’s worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in stock in a public company through a separate private company.
I find it very interesting to see who exactly owns a company. But to really gain insight, we need to consider other information as well. Take risks, for example — Savannah Energy did 3 warning signs (and 1 thing that makes us a little awkward) that we think you should know about.
If you’re like me, you might want to think about whether this company is going to grow or shrink. Luckily, you can check out this free report that includes analyst forecasts for the future.
Note: The figures in this article are calculated using data for the last twelve months, relating to the 12-month period ending on the last date of the month to which the financial statements are dated. This may not match the figures in the full year report.
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This Simply Wall St article is of a general nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned.