Here's What Pipestone Energy Corp.'s (TSE:PIPE) Shareholder Ownership Structure Looks Like

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Simply Wall St

Mon, May 9, 2022, 4:20 AM 4 min read

A look at the shareholders of Pipestone Energy Corp. (TSE:PIPE) can tell us which group is most powerful. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. We also tend to see lower insider ownership in companies that were previously publicly owned.

Pipestone Energy is a smaller company with a market capitalization of CA$945m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Pipestone Energy.

View our latest analysis for Pipestone Energy

ownership-breakdown — TSX:PIPE Ownership Breakdown May 9th 2022

What Does The Institutional Ownership Tell Us About Pipestone 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 Pipestone Energy does have institutional investors; and they hold a good portion of the company's stock. 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 Pipestone Energy's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — TSX:PIPE Earnings and Revenue Growth May 9th 2022

It looks like hedge funds own 14% of Pipestone Energy shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Riverstone Pipestone LP is currently the largest shareholder, with 19% of shares outstanding. Al Mehwar Commercial Investments L.L.C. is the second largest shareholder owning 16% of common stock, and GMT Capital Corp. holds about 14% of the company stock.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Pipestone Energy

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Pipestone Energy Corp.. It has a market capitalization of just CA$945m, and insiders have CA$26m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 40% stake in Pipestone Energy. 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 23%, of the Pipestone Energy stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Pipestone Energy better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Pipestone Energy 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.