Could The Bahamas Petroleum Company plc (LON:BPC) Ownership Structure Tell Us Something Useful?

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Simply Wall St

Mon, Aug 10, 2020, 12:38 AM 4 min read

The big shareholder groups in Bahamas Petroleum Company plc (LON:BPC) have power over the company. 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.

Bahamas Petroleum is not a large company by global standards. It has a market capitalization of UK£91m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Bahamas Petroleum.

Check out our latest analysis for Bahamas Petroleum

ownership-breakdown — AIM:BPC Ownership Breakdown August 10th 2020

What Does The Institutional Ownership Tell Us About Bahamas Petroleum?

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.

Bahamas Petroleum already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Bahamas Petroleum's earnings history, below. Of course, the future is what really matters.

earnings-and-revenue-growth — AIM:BPC Earnings and Revenue Growth August 10th 2020

Hedge funds don't have many shares in Bahamas Petroleum. Standard Life Aberdeen plc is currently the company's largest shareholder with 7.2% of shares outstanding. Barclays Bank PLC, Wealth and Investment Management Division is the second largest shareholder owning 5.3% of common stock, and IG Group Holdings Plc, Asset Management Arm holds about 4.2% of the company stock.

A deeper look at our ownership data shows that the top 12 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no one share holder has a majority.

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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Bahamas Petroleum

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own some shares in Bahamas Petroleum Company plc. It has a market capitalization of just UK£91m, and insiders have UK£2.6m worth of shares, in their own names. This shows at least some alignment, but I 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, mostly retail investors, hold a substantial 54% stake in BPC, suggesting it is a fairly popular stock. With this size of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Bahamas Petroleum (1 is significant) that you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

This article by Simply Wall St is general in nature. 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.

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