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A look at the shareholders of Contact Energy Limited (NZSE:CEN) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.
Contact Energy has a market capitalization of NZ$5.3b, so it's too big to fly under the radar. We'd expect to see both institutions and retail investors owning a portion of the company. In the chart below below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about CEN.
View our latest analysis for Contact Energy
What Does The Institutional Ownership Tell Us About Contact Energy?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Contact Energy does have institutional investors; and they hold 33% of the stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Contact Energy, (below). Of course, keep in mind that there are other factors to consider, too.
We note that hedge funds don't have a meaningful investment in Contact Energy. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Contact 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 information suggests that Contact Energy Limited insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own NZ$7.5m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.