Both individual investors who control a good portion of TXO Partners, L.P. (NYSE:TXO) along with institutions must be dismayed after last week's 8.0% decrease
Key Insights
- The considerable ownership by individual investors in TXO Partners indicates that they collectively have a greater say in management and business strategy
- The top 17 shareholders own 51% of the company
- 24% of TXO Partners is held by insiders
To get a sense of who is truly in control of TXO Partners, L.P. (NYSE:TXO), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 44% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
While institutions, who own 32% shares weren’t spared from last week’s US$53m market cap drop, individual investors as a group suffered the maximum losses
In the chart below, we zoom in on the different ownership groups of TXO Partners.
View our latest analysis for TXO Partners
What Does The Institutional Ownership Tell Us About TXO Partners?
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.
TXO Partners 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of TXO Partners, (below). Of course, keep in mind that there are other factors to consider, too.
TXO Partners is not owned by hedge funds. Our data shows that Bob Simpson is the largest shareholder with 12% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.8% and 5.6%, of the shares outstanding, respectively. Furthermore, CEO Brent Clum is the owner of 0.7% of the company's shares.
A closer look at our ownership figures suggests that the top 17 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.
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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of TXO Partners
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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our information suggests that insiders maintain a significant holding in TXO Partners, L.P.. Insiders own US$151m worth of shares in the US$619m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that TXO Partners is showing 4 warning signs in our investment analysis , you should know about...
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.