Key Insights

• Given the large stake in the stock by institutions, AFC Energy's stock price might be vulnerable to their trading decisions

• A total of 25 investors have a majority stake in the company with 44% ownership

• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

If you want to know who really controls AFC Energy plc (LON:AFC), then you'll have to look at the makeup of its share registry. With 49% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

In the chart below, we zoom in on the different ownership groups of AFC Energy.

See our latest analysis for AFC Energy

What Does The Institutional Ownership Tell Us About AFC 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.

AFC Energy 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 AFC Energy's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in AFC Energy. HBOS Investment Fund Managers Limited is currently the largest shareholder, with 5.2% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.1% and 4.8% of the stock.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder 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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.