Institutions profited after Nordic American Tankers Limited's (NYSE:NAT) market cap rose US$63m last week but individual investors profited the most
Key Insights
Significant control over Nordic American Tankers by individual investors implies that the general public has more power to influence management and governance-related decisions
A total of 25 investors have a majority stake in the company with 40% ownership
A look at the shareholders of Nordic American Tankers Limited (NYSE:NAT) can tell us which group is most powerful. With 51% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While individual investors were the group that reaped the most benefits after last week’s 7.9% price gain, institutions also received a 46% cut.
Let's delve deeper into each type of owner of Nordic American Tankers, beginning with the chart below.
See our latest analysis for Nordic American Tankers
What Does The Institutional Ownership Tell Us About Nordic American Tankers?
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.
Nordic American Tankers 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 Nordic American Tankers' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Nordic American Tankers. Our data shows that BlackRock, Inc. is the largest shareholder with 5.8% of shares outstanding. Millennium Management LLC is the second largest shareholder owning 3.4% of common stock, and Dimensional Fund Advisors LP holds about 3.0% of the company stock. Additionally, the company's CEO Herbjorn Hansson directly holds 2.0% of the total shares outstanding.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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 Nordic American Tankers
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
We can see that insiders own shares in Nordic American Tankers Limited. It has a market capitalization of just US$852m, and insiders have US$26m worth of shares, in their own names. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 51% stake in Nordic American Tankers, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 3 warning signs we've spotted with Nordic American Tankers .
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.
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