Institutional investors own a significant stake of 44% in Atlantica Sustainable Infrastructure plc (NASDAQ:AY)
Key Insights
Institutions' substantial holdings in Atlantica Sustainable Infrastructure implies that they have significant influence over the company's share price
50% of the business is held by the top 3 shareholders
Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
If you want to know who really controls Atlantica Sustainable Infrastructure plc (NASDAQ:AY), then you'll have to look at the makeup of its share registry. With 44% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.
Let's take a closer look to see what the different types of shareholders can tell us about Atlantica Sustainable Infrastructure.
See our latest analysis for Atlantica Sustainable Infrastructure
What Does The Institutional Ownership Tell Us About Atlantica Sustainable Infrastructure?
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.
We can see that Atlantica Sustainable Infrastructure 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 Atlantica Sustainable Infrastructure's historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Atlantica Sustainable Infrastructure. Algonquin Power & Utilities Corp. is currently the largest shareholder, with 42% of shares outstanding. The second and third largest shareholders are Wellington Management Group LLP and Morgan Stanley, Investment Banking and Brokerage Investments, with an equal amount of shares to their name at 4.2%.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 50% stake.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Atlantica Sustainable Infrastructure
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.
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 data suggests that insiders own under 1% of Atlantica Sustainable Infrastructure plc in their own names. Keep in mind that it's a big company, and the insiders own US$2.7m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
With a 13% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Atlantica Sustainable Infrastructure. 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.
Public Company Ownership
We can see that public companies hold 42% of the Atlantica Sustainable Infrastructure shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Atlantica Sustainable Infrastructure better, we need to consider many other factors. Take risks for example - Atlantica Sustainable Infrastructure has 3 warning signs (and 1 which can't be ignored) we think you should know about.
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.
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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.
