i3 Energy Plc (LON:I3E) has caught the attention of institutional investors who hold a sizeable 48% stake
Key Insights
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Given the large stake in the stock by institutions, i3 Energy's stock price might be vulnerable to their trading decisions
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A total of 5 investors have a majority stake in the company with 50% ownership
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Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business
Every investor in i3 Energy Plc (LON:I3E) should be aware of the most powerful shareholder groups. With 48% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
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. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.
In the chart below, we zoom in on the different ownership groups of i3 Energy.
View our latest analysis for i3 Energy
What Does The Institutional Ownership Tell Us About i3 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.
i3 Energy already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of i3 Energy, (below). Of course, keep in mind that there are other factors to consider, too.
Our data indicates that hedge funds own 19% of i3 Energy. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Polus Capital Management Limited is currently the company's largest shareholder with 19% of shares outstanding. In comparison, the second and third largest shareholders hold about 10.0% and 9.1% of the stock. Furthermore, CEO Majid Shafiq is the owner of 0.8% of the company's shares.
Our research also brought to light the fact that roughly 50% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.
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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.