If you want to know who really controls Carnarvon Petroleum Limited (ASX:CVN), then you’ll have to look at the makeup of its share registry.
Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.
Carnarvon Petroleum is not a large company by global standards. It has a market capitalization of AU$429m, which means it wouldn’t have the attention of many institutional investors.
In the chart below below, we can see that
institutions are not really that prevalent on the share registry.
We can zoom in on the different ownership groups, to learn more about CVN.
Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.
What Does The Institutional Ownership Tell Us About Carnarvon Petroleum?
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.
Institutions own less than 5% of Carnarvon Petroleum. That indicates that the company is on the radar of some funds, but it isn’t particularly popular with professional investors at the moment.
If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors.
When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.
We note that hedge funds don’t have a meaningful investment in Carnarvon Petroleum.
There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Carnarvon Petroleum
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders.
The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
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.
We can see that insiders own shares in Carnarvon Petroleum Limited.
As individuals, the insiders collectively own AU$22m worth of the AU$429m company.
This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, mostly retail investors, hold a substantial 86% stake in CVN, suggesting it is a fairly popular stock.
This size of ownership gives retail investors collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Private Company Ownership
Our data indicates that Private Companies hold 6.6%, of the company’s shares.
Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it’s hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
While it is well worth considering the different groups that own a company, there are other factors that are even more important.
Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .
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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.
Discounted cash flow calculation for every stock
Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.