Genesis Energy Limited's (NZSE:GNE) largest shareholders are state or government who were rewarded as market cap surged NZ$102m last week
Key Insights
Genesis Energy's significant state or government ownership suggests that the key decisions are influenced by shareholders from the larger public
The largest shareholder of the company is New Zealand with a 51% stake
Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company
Every investor in Genesis Energy Limited (NZSE:GNE) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are state or government with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
As a result, state or government collectively scored the highest last week as the company hit NZ$2.6b market cap following a 4.1% gain in the stock.
Let's take a closer look to see what the different types of shareholders can tell us about Genesis Energy.
See our latest analysis for Genesis Energy
What Does The Institutional Ownership Tell Us About Genesis Energy?
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.
Genesis Energy already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Genesis Energy's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Genesis Energy. Our data shows that New Zealand is the largest shareholder with 51% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 1.7% of the shares outstanding, followed by an ownership of 1.3% by the third-largest shareholder.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Genesis Energy
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 less than 1% of Genesis Energy Limited. Keep in mind that it's a big company, and the insiders own NZ$9.9m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 41% stake in Genesis Energy. 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.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 3 warning signs we've spotted with Genesis Energy (including 1 which is a bit unpleasant) .
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
