The considerable ownership by retail investors in Energy Fuels indicates that they collectively have a greater say in management and business strategy
The top 25 shareholders own 40% of the company
If you want to know who really controls Energy Fuels Inc. (TSE:EFR), then you’ll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While the holdings of retail investors took a hit after last week’s 7.4% price drop, institutions with their 48% holdings also suffered.
Let’s delve deeper into each type of owner of Energy Fuels, beginning with the chart below.
Check out our latest analysis for Energy Fuels
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 Energy Fuels does have institutional investors; and they hold a good portion of the company’s stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Energy Fuels’ historic earnings and revenue below, but keep in mind there’s always more to the story.
Hedge funds don’t have many shares in Energy Fuels. Looking at our data, we can see that the largest shareholder is ALPS Advisors, Inc. with 6.7% of shares outstanding. Mirae Asset Global Investments Co., Ltd. is the second largest shareholder owning 5.7% of common stock, and BlackRock, Inc. holds about 5.6% of the company stock.
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 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
We can see that insiders own shares in Energy Fuels Inc.. This is a big company, so it is good to see this level of alignment. Insiders own CA$37m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
The general public, mostly comprising of individual investors, collectively holds 50% of Energy Fuels shares. 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.
It’s always worth thinking about the different groups who own shares in a company. But to understand Energy Fuels better, we need to consider many other factors. Case in point: We’ve spotted 1 warning sign for Energy Fuels you should be aware of.
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.
This article was originally published here.
