The large shareholder groups of Boss Energy Limited (ASX:BOE) have power over the company. Institutions often own shares in larger companies, and we expect to see insiders owning a noticeable percentage of smaller ones. Companies that were previously publicly owned tend to have less insider ownership.
Boss Energy is a small company with a market capitalization of A$820 million, so it may still fly under the radar of many institutional investors. Looking at our ownership group data (below), it appears that institutions are visible on the share register. Let’s dig deeper into each owner type to learn more about Boss Energy.
Check out our latest analysis for Boss Energy
What does institutional ownership tell us about Boss Energy?
Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
We can see that Boss Energy has institutional investors; and they own a good part of the shares of the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out Boss Energy’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.
Boss Energy is not owned by hedge funds. The company’s largest shareholder is Paradice Investment Management Pty Ltd. with a 7.7% stake. Meanwhile, the second and third largest shareholders hold 4.8% and 4.6% of the outstanding shares respectively.
A closer look at our ownership data shows that the top 24 shareholders collectively own less than half of the register, suggesting a large group of small shareholders where no single shareholder has a majority.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Boss Energy Insider Ownership
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Shareholders would probably be interested to learn that insiders hold shares of Boss Energy Limited. It has a market capitalization of just A$820 million and insiders hold A$39 million worth of shares, in their own name. It’s good to see insider investing, but it might be worth checking to see if those insiders have been buying.
General public property
The general public – including retail investors – owns 58% of Boss Energy. This level of ownership gives mainstream investors some power to influence key policy decisions such as board composition, executive compensation, and dividend payout ratio.
It is always useful to think about the different groups that own shares in a company. But to better understand Boss Energy, we need to consider many other factors. Example: we have identified 3 warning signs for Boss Energy you should be aware of, and 2 of them are potentially serious.
If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.