Yahoo Finance While individual investors own 40% of Paramount Resources Ltd. (TSE:POU), private companies are its largest shareholders with 45% ownership
Key Insights
The considerable ownership by private companies in Paramount Resources indicates that they collectively have a greater say in management and business strategy
The top 5 shareholders own 51% of the company
Every investor in Paramount Resources Ltd. (TSE:POU) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Individual investors, on the other hand, account for 40% of the company's stockholders.
Let's delve deeper into each type of owner of Paramount Resources, beginning with the chart below.
Check out our latest analysis for Paramount Resources
What Does The Institutional Ownership Tell Us About Paramount Resources?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Paramount Resources 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Paramount Resources' historic earnings and revenue below, but keep in mind there's always more to the story.
Paramount Resources is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Warner Investment Holdings Ltd. with 25% of shares outstanding. The second and third largest shareholders are Treherne Resources Ltd. and Universal Investment Holdings Limited, with an equal amount of shares to their name at 10%. Furthermore, CEO James H. Riddell is the owner of 0.5% of the company's shares.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Paramount Resources
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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own some shares in Paramount Resources Ltd.. This is a big company, so it is good to see this level of alignment. Insiders own CA$56m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 40% stake in Paramount Resources. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Company Ownership
We can see that Private Companies own 45%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Paramount Resources you should know about.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
