DNO ASA (OB:DNO) stock price fell 6.6% last week; public companies would not be happy

Every investor in DNO ASA (OB:DNO) should know the most powerful shareholder groups. We can see that public companies hold the lion’s share of the company with 45% ownership. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).

And last week, public companies suffered the biggest losses, with the stock dropping 6.6%.

Let’s dive deeper into each type of DNO owner, starting with the table below.

See our latest analysis for DNO

OB: DNO Ownership Breakdown June 14, 2022

What does institutional ownership tell us about DNO?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

As you can see, institutional investors hold a sizeable share of DNO. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. 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 DNO’s revenue and historical earnings below, but keep in mind there’s always more to tell.

earnings-and-revenue-growth
OB:DNO Earnings and Revenue Growth June 14, 2022

Hedge funds don’t have a lot of shares in DNO. RAK Petroleum plc is currently the largest shareholder, with 45% of the outstanding shares. Folketrygdfondet is the second largest shareholder with 4.1% of the common stock and The Vanguard Group, Inc. owns approximately 1.8% of the company’s stock.

To make our study more interesting, we found that the top 3 shareholders hold a majority stake in the company, which means they are powerful enough to influence company decisions.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. Although there is some analyst coverage, the company is probably not widely covered. So it could attract more attention, on the track.

DNO Insider Ownership

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Our data suggests that insiders hold less than 1% of DNO ASA in their own name. Keep in mind this is a big company and insiders hold 7.8 million kr worth of shares. The absolute value can be more important than the proportional part. Arguably, recent purchases and sales are equally important to consider. You can click here to see if insiders have been buying or selling.

General public property

With a 40% stake, the general public, consisting mainly of individual investors, has some influence over DNO. 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.

Ownership of a public company

Public enterprises currently hold 45% of DNO’s shares. It’s hard to say for sure, but it suggests they have intertwined business interests. This could be a strategic stake, so it’s worth monitoring this space for ownership changes.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand DNO, we need to consider many other factors. Take for example the ubiquitous specter of investment risk. We have identified 1 warning sign with DNO and understanding them should be part of your investment process.

But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Karen J. Nelson