Which type of shareholders owns the most shares of CENAQ Energy Corp.? (NASDAQ: CENQ)?
The major shareholder groups of CENAQ Energy Corp. (NASDAQ: CENQ) have power over the company. Institutions often own shares in larger companies, and we expect to see insiders owning a noticeable percentage of smaller ones. We also tend to see a decline in insider participation in companies that were previously public.
CENAQ Energy is a small company with a market capitalization of US$219 million, so it may still fly under the radar of many institutional investors. Looking at our ownership group data (below), it appears that institutions are visible on the share register. We can zoom in on the different ownership groups, to learn more about CENAQ Energy.
What does institutional ownership tell us about CENAQ 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.
As you can see, institutional investors hold a significant share of CENAQ Energy. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see CENAQ Energy’s historic earnings and revenue below, but keep in mind there’s always more to tell.
Since institutional investors own more than half of the issued shares, the board will likely have to pay attention to their preferences. It appears that hedge funds hold 13% of CENAQ Energy shares. This is worth noting, as hedge funds are often quite active investors, who may try to influence management. Many want value creation (and a rise in share price) in the short to medium term. Sponsor CENAQ LLC. is currently the largest shareholder, with 16% of the outstanding shares. With 6.5% and 6.0% of the shares outstanding, respectively, Saba Capital Management, LP and Highbridge Capital Management, LLC are the second and third largest shareholders.
We also observed that the top 9 shareholders represent more than half of the share register, with some small shareholders to balance the interests of the larger ones to some extent.
While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. We don’t see any analyst coverage of the stock at this time, so the company is unlikely to be widely held.
Insider ownership of CENAQ Energy
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.
Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.
We note that our data does not show any board members personally owning shares. It is unusual not to have at least some personal holdings of board members, so our data could be in error. A good next step would be to check how much the CEO is paid.
General public property
With a 13% stake, the general public, consisting mainly of individual investors, has some influence over CENAQ Energy. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.
Private Company Ownership
We can see that private companies hold 16% of the issued shares. It’s hard to draw conclusions from this fact alone, so it’s worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.
It is always useful to think about the different groups that own shares in a company. But to better understand CENAQ Energy, we need to consider many other factors. Take for example the ubiquitous specter of investment risk. We have identified 4 warning signs with CENAQ Energy (at least 3 that should not be overlooked) and understanding them should be part of your investment process.
If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of interesting companies, supported by solid financial data.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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