SandRidge Energy, Inc.'s (NYSE:SD) one-year returns climbed after last week's 10% gain, institutional investors must be happy
In This Article:
Key Insights
-
Significantly high institutional ownership implies SandRidge Energy's stock price is sensitive to their trading actions
-
A total of 15 investors have a majority stake in the company with 50% ownership
-
Past performance of a company along with ownership data serve to give a strong idea about prospects for a business
Every investor in SandRidge Energy, Inc. (NYSE:SD) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 68% to be precise, is institutions. Put another way, the group faces the maximum upside potential (or downside risk).
And last week, institutional investors ended up benefitting the most after the company hit US$457m in market cap. One-year return to shareholders is currently 0.6% and last week’s gain was the icing on the cake.
Let's take a closer look to see what the different types of shareholders can tell us about SandRidge Energy.
View our latest analysis for SandRidge Energy
What Does The Institutional Ownership Tell Us About SandRidge Energy?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in SandRidge Energy. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 SandRidge Energy's historic earnings and revenue below, but keep in mind there's always more to the story.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in SandRidge Energy. Looking at our data, we can see that the largest shareholder is Icahn Capital LP with 13% of shares outstanding. With 6.5% and 5.8% of the shares outstanding respectively, BlackRock, Inc. and The Vanguard Group, Inc. are the second and third largest shareholders.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 15 shareholders, meaning that no single shareholder has a majority interest in the ownership.