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The big shareholder groups in Freedom Oil and Gas Ltd (ASX:FDM) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’
Freedom Oil and Gas is a smaller company with a market capitalization of AU$124m, so it may still be flying under the radar of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutional investors have not yet purchased much of the company. Let’s delve deeper into each type of owner, to discover more about FDM.
See our latest analysis for Freedom Oil and Gas
What Does The Lack Of Institutional Ownership Tell Us About Freedom Oil and Gas?
Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them.
There are multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to fund under management, so the institition does not bother to look closely at the company. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Freedom Oil and Gas, for yourself, below.
Freedom Oil and Gas is not owned by hedge funds. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Freedom Oil and Gas
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 insiders maintain a significant holding in Freedom Oil and Gas Ltd. Insiders own AU$19m worth of shares in the AU$124m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.