Key Insights

The considerable ownership by retail investors in NOVONIX indicates that they collectively have a greater say in management and business strategy A total of 25 investors have a majority stake in the company with 41% ownership Recent purchases by insiders

Every investor in NOVONIX Limited (ASX:NVX) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And public companies on the other hand have a 16% ownership in the company.

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

Check out our latest analysis for NOVONIX  ownership-breakdown

What Does The Institutional Ownership Tell Us About NOVONIX?

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

NOVONIX 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. 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 NOVONIX's historic earnings and revenue below, but keep in mind there's always more to the story. earnings-and-revenue-growth

Hedge funds don't have many shares in NOVONIX. Phillips 66 is currently the company's largest shareholder with 16% of shares outstanding. With 4.1% and 3.9% of the shares outstanding respectively, Trevor St. Baker and St Baker Energy Managers Pty. Ltd. are the second and third largest shareholders. Furthermore, CEO John Burns is the owner of 0.7% of the company's shares.



On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of NOVONIX

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of NOVONIX Limited. It has a market capitalization of just AU$332m, and insiders have AU$39m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can  click here to see if those insiders have been buying or selling.

General Public Ownership

The general public -- including retail investors -- own 59% of NOVONIX. 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.

Public Company Ownership

We can see that public companies hold 16% of the NOVONIX shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified  2 warning signs for NOVONIX (1 makes us a bit uncomfortable)  that you should be aware of.

Ultimately the future is most important. You can access this freereport on analyst forecasts for the company.

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.