U.S. Markets open in 9 hrs 3 mins
  • S&P Futures

    4,163.50
    +1.00 (+0.02%)
     
  • Dow Futures

    33,933.00
    +10.00 (+0.03%)
     
  • Nasdaq Futures

    14,014.25
    +0.25 (+0.00%)
     
  • Russell 2000 Futures

    2,257.20
    +1.50 (+0.07%)
     
  • Crude Oil

    63.37
    -0.09 (-0.14%)
     
  • Gold

    1,764.90
    -1.90 (-0.11%)
     
  • Silver

    25.92
    -0.04 (-0.17%)
     
  • EUR/USD

    1.1973
    -0.0003 (-0.0240%)
     
  • 10-Yr Bond

    1.5300
    -0.1080 (-6.59%)
     
  • Vix

    16.57
    -0.42 (-2.47%)
     
  • GBP/USD

    1.3784
    -0.0001 (-0.0041%)
     
  • USD/JPY

    108.6920
    -0.0240 (-0.0221%)
     
  • BTC-USD

    62,860.92
    -311.25 (-0.49%)
     
  • CMC Crypto 200

    1,397.85
    +16.90 (+1.22%)
     
  • FTSE 100

    6,983.50
    +43.92 (+0.63%)
     
  • Nikkei 225

    29,642.69
    +21.70 (+0.07%)
     

Could G3 Exploration Limited's (LON:G3E) Investor Composition Influence The Stock Price?

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
  • Oops!
    Something went wrong.
    Please try again later.

A look at the shareholders of G3 Exploration Limited (LON:G3E) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.'

G3 Exploration is not a large company by global standards. It has a market capitalization of UK£55m, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it's seems 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 G3E.

Check out our latest analysis for G3 Exploration

LSE:G3E Ownership Summary, September 17th 2019
LSE:G3E Ownership Summary, September 17th 2019

What Does The Institutional Ownership Tell Us About G3 Exploration?

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

As you can see, institutional investors own 5.5% of G3 Exploration. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 G3 Exploration's earnings history, below. Of course, the future is what really matters.

LSE:G3E Income Statement, September 17th 2019
LSE:G3E Income Statement, September 17th 2019

We note that hedge funds don't have a meaningful investment in G3 Exploration. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of G3 Exploration

The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own the majority of G3 Exploration Limited. This means they can collectively make decisions for the company. Given it has a market cap of UK£55m, that means they have UK£31m worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, with a 16% stake in the company, will not easily be ignored. 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 Company Ownership

Our data indicates that Private Companies hold 23%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.