I am going to take a deep dive into Hunter Maritime Acquisition Corp’s (NASDAQ:HUNT) most recent ownership structure, not a frequent subject of discussion among individual investors. Ownership structure of a company has been found to affect share performance over time. Differences in ownership structure of companies can have a profound effect on how management’s incentives are aligned with shareholder returns, which is why we’ll take a moment to analyse HUNT’s shareholder registry.
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Institutional Ownership
With an institutional ownership of 300.92%, HUNT can face volatile stock price movements if institutions execute block trades on the open market, more so, when there are relatively small amounts of shares available on the market to trade These moves, at least in the short-term, are generally observed in an institutional ownership mix comprising of active stock pickers, in particular levered hedge funds, which can cause large price swings. For HUNT shareholders, the potential of this type of share price volatility shouldn’t be as concerning as hedge fund ownership is is not significant,indicating few chances of such sudden price moves. While that hardly seems concerning, I will explore further into HUNT’s ownership type to find out how it can affect the company’s investment profile.
Private Company Ownership
Potential investors in HUNT should also look at another important group of investors: private companies, with a stake of 130.12%, who are primarily invested because of strategic and capital gain interests. An ownership of this size indicates a strong financial backing and has the potential to influence HUNT’s business strategy. Thus, investors should dig deeper into HUNT’s business relations with these companies and how it can affect shareholder returns in the long-term.
Next Steps:
The company’s high institutional ownership makes margin of safety a very important consideration to existing investors since long bull and bear trends often emerge when these big-ticket investors see a change in long-term potential of the company. This is to avoid getting trapped in a sustained sell-off that is often observed in stocks with this level of institutional participation. However, ownership structure should not be the only focus of your research when constructing an investment thesis around HUNT. Rather, you should be looking at fundamental drivers such as Hunter Maritime Acquisition’s past track record and financial health. I highly recommend you to complete your research by taking a look at the following: