A look at the shareholders of Challenger Exploration Limited (ASX:CEL) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes "a business with enduring competitive advantages that is run by able and owner-oriented people." So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Challenger Exploration is not a large company by global standards. It has a market capitalization of AU$323m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Challenger Exploration.

Check out our latest analysis for Challenger Exploration  ownership-breakdown

What Does The Institutional Ownership Tell Us About Challenger Exploration?

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.

Challenger Exploration already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Challenger Exploration's earnings history below. Of course, the future is what really matters. earnings-and-revenue-growth

We note that hedge funds don't have a meaningful investment in Challenger Exploration. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 10.0% of shares outstanding. With 9.1% and 5.3% of the shares outstanding respectively, Sergio Rotondo and Kris Knauer are the second and third largest shareholders. Kris Knauer, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.



A deeper look at our ownership data shows that the top 24 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Challenger Exploration

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 a reasonable proportion of Challenger Exploration Limited. It has a market capitalization of just AU$323m, and insiders have AU$76m worth of shares in their own names. 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, who are usually individual investors, hold a substantial 51% stake in Challenger Exploration, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

We can see that Private Companies own 13%, 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. Case in point: We've spotted  3 warning signs for Challenger Exploration you should be aware of, and 2 of them shouldn't be ignored.

Of course this may not be the best stock to buy. So take a peek at this freefree list of interesting companies.

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.