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Could The Altus Midstream Company (NASDAQ:ALTM) Ownership Structure Tell Us Something Useful?

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If you want to know who really controls Altus Midstream Company (NASDAQ:ALTM), then you’ll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

Altus Midstream isn’t enormous, but it’s not particularly small either. It has a market capitalization of US$2.7b, which means it would generally expect to see some institutions on the share registry. In the chart below below, we can see that institutions are noticeable on the share registry. Let’s take a closer look to see what the different types of shareholder can tell us about ALTM.

See our latest analysis for Altus Midstream

NASDAQCM:ALTM Ownership Summary February 7th 19
NASDAQCM:ALTM Ownership Summary February 7th 19

What Does The Institutional Ownership Tell Us About Altus Midstream?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Altus Midstream already has institutions on the share registry. Indeed, they own 5.6% of the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Altus Midstream’s earnings history, below. Of course, the future is what really matters.

NASDAQCM:ALTM Income Statement Export February 7th 19
NASDAQCM:ALTM Income Statement Export February 7th 19

Hedge funds don’t have many shares in Altus Midstream. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Altus Midstream

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Altus Midstream Company. It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own US$19m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public holds a 12% stake in ALTM. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

Private equity firms hold a 4.7% stake in ALTM. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Altus Midstream better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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 editorial-team@simplywallst.com.