AFC Energy plc (LON:AFC) is favoured by institutional owners who hold 66% of the company

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6 days ago

Key Insights
Significantly high institutional ownership implies AFC Energy's stock price is sensitive to their trading actions
A total of 12 investors have a majority stake in the company with 50% ownership
Recent purchases by insiders
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To get a sense of who is truly in control of AFC Energy plc (LON:AFC), it is important to understand the ownership structure of the business. We can see that institutions own the lion's share in the company with 66% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
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.
In the chart below, we zoom in on the different ownership groups of AFC Energy.
See our latest analysis for AFC Energy
What Does The Institutional Ownership Tell Us About AFC 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.
We can see that AFC Energy 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at AFC Energy's earnings history below. Of course, the future is what really matters.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. AFC Energy is not owned by hedge funds. Hargreaves Lansdown Asset Management Ltd. is currently the largest shareholder, with 12% of shares outstanding. With 10.0% and 5.2% of the shares outstanding respectively, Aberdeen Group Plc and HBOS Investment Fund Managers Limited are the second and third largest shareholders.
A closer look at our ownership figures suggests that the top 12 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of AFC 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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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 AFC Energy plc. It appears that the board holds about UK£806k worth of stock. This compares to a market capitalization of UK£108m. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 30% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that AFC Energy is showing 4 warning signs in our investment analysis , and 2 of those are potentially serious...
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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