With 66% ownership of the shares, Cooper Energy Limited (ASX:COE) is heavily dominated by institutional owners

editorial-team@simplywallst.com (Simply Wall St)

Mon, Oct 16, 2023, 10:15 PM 4 min read

Key Insights

Given the large stake in the stock by institutions, Cooper Energy's stock price might be vulnerable to their trading decisions
The top 6 shareholders own 54% of the company
Insiders have bought recently

A look at the shareholders of Cooper Energy Limited (ASX:COE) can tell us which group is most powerful. The group holding the most number of shares in the company, around 66% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

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. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.

Let's take a closer look to see what the different types of shareholders can tell us about Cooper Energy.

Check out our latest analysis for Cooper Energy

ownership-breakdown — ASX:COE Ownership Breakdown October 17th 2023

What Does The Institutional Ownership Tell Us About Cooper Energy?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Cooper Energy. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Cooper Energy's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — ASX:COE Earnings and Revenue Growth October 17th 2023

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. We note that hedge funds don't have a meaningful investment in Cooper Energy. Our data shows that L1 Capital Pty. Limited is the largest shareholder with 17% of shares outstanding. Challenger Limited is the second largest shareholder owning 9.3% of common stock, and First Sentier Investors (Australia) IM Ltd holds about 8.6% of the company stock.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 Cooper Energy

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Shareholders would probably be interested to learn that insiders own shares in Cooper Energy Limited. In their own names, insiders own AU$6.8m worth of stock in the AU$303m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 26% 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.

Private Company Ownership

It seems that Private Companies own 5.2%, of the Cooper Energy stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Cooper Energy better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Cooper Energy 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.