Is Genco Shipping & Trading Limited (NYSE:GNK) Popular Amongst Institutions?
The big shareholder groups in Genco Shipping & Trading Limited (NYSE:GNK) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.
With a market capitalization of US$446m, Genco Shipping & Trading is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about Genco Shipping & Trading.
See our latest analysis for Genco Shipping & Trading
What Does The Institutional Ownership Tell Us About Genco Shipping & Trading?
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.
We can see that Genco Shipping & Trading does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Genco Shipping & Trading's historic earnings and revenue below, but keep in mind there's always more to the story.
Our data indicates that hedge funds own 6.4% of Genco Shipping & Trading. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Centerbridge Partners, L.P. is currently the company's largest shareholder with 22% of shares outstanding. Pelerin Global Corp is the second largest shareholder owning 6.4% of common stock, and Dimensional Fund Advisors L.P. holds about 3.4% of the company stock. Furthermore, CEO John Wobensmith is the owner of 0.9% of the company's shares.
A closer look at our ownership figures suggests that the top 20 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Genco Shipping & Trading
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. 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.
Our most recent data indicates that insiders own less than 1% of Genco Shipping & Trading Limited. It seems the board members have no more than US$4.4m worth of shares in the US$446m company. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
With a 44% ownership, the general public have some degree of sway over Genco Shipping & Trading. 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
With an ownership of 22%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Genco Shipping & Trading has 1 warning sign we think you should be aware of.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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