What you need to know about the AFC Energy plc (LON: AFC) investor makeup

If you want to know who really controls AFC Energy plc (LON: AFC), you need to look at the composition of the share register. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their holdings over time. Companies that have been privatized tend to have low levels of insider ownership.

AFC Energy is not a large company by global standards. It has a market capitalization of £ 355 million which means it would not have the attention of many institutional investors. In the chart below we can see that institutional investors have bought into the company. Let’s take a closer look at what the different types of shareholders can tell us about AFC Energy.

Check out our latest analysis for AFC Energy

Ownership structure

What does institutional ownership tell us about AFC Energy?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they are often more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutes on the register, especially as they grow.

As you can see, institutional investors have a significant stake in AFC Energy. This suggests some credibility among professional investors. But we cannot rely on that alone, because institutions sometimes make bad investments, as everyone does. If several institutes own a share, there is always the risk that they are in a “crowd trade”. When such a trade goes wrong, multiple parties can compete to sell stocks quickly. This risk is higher in a company with no history of growth. You can check out AFC Energy’s historical earnings and earnings below, but remember that history always includes more.

Revenue-and-revenue growth

Revenue-and-revenue growth

Investors should note that institutions actually own more than half of the company, so together they can exert significant power. We find that hedge funds are not making a sensible investment in AFC Energy. Our data shows that Hargreaves Lansdown Asset Management Limited is the largest shareholder with 13% of the shares outstanding. DZ Bank AG, Asset Management Arm, is the second largest shareholder with 5.7% of the common shares, and HSBC Global Asset Management (UK) Limited holds approximately 5.4% of the company’s shares.

After further research, we found that the top 11 collectively own 50% of the company, which suggests that no single shareholder has material control over the company.

While it makes sense to examine institutional ownership data for a company, it also makes sense to examine analyst sentiment to know which way the wind is blowing. There are some analyst reports on the stock, but it could get more prominent over time.

AFC Energy inside property

The definition of an insider can vary slightly from country to country, but board members always count. The top management runs the business, but the CEO will be accountable to the board even if he or she is a member of the board.

I generally think insider ownership is a good thing. In some cases, however, it makes it difficult for other shareholders to hold the board responsible for decisions.

Our latest data shows that Insiders own less than 1% of AFC Energy plc. But they may have an indirect interest through a corporate structure that we did not address. It appears that the directors do not own more than £ 2.0m in shares in the £ 355m company. Many prefer to see a board of directors with larger holdings. A good next step might be to check out this free roundup of Insider Buying and Selling.

General public property

The general public – including retail investors – owns 16% of the company’s shares and therefore cannot be simply ignored. While this property size may not be sufficient to sway a political decision in their favor, they can still have a collective influence on company policy.

Next Steps:

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. Notice that AFC Energy is displayed 6 warning signs in our investment analysis , and 2 of them should not be ignored …

But in the end it is the future, not the past that will determine how well the owners of this company will fare. Hence, we think it would be wise to take a look at this free report which shows whether analysts are predicting a brighter future.

Note: The numbers in this article are calculated using data from the past twelve months, which refers to the twelve month period ending on the last day of the month in which the financial statements are dated. This may not match the figures in the financial statements.

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This article from Simply Wall St is of a general nature. We only provide comments based on historical data and analyst projections using an unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks and does not take into account your goals or your financial situation. Our goal is to provide you with long-term, focused analysis based on fundamentals. Note that our analysis may not take into account the latest company announcements or quality material, which may be sensitive to the price. Simply Wall St has no position in any of the stocks mentioned.

About Nina Snider

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