Antero Resources Corporation’s (NYSE:AR) large institutional owners must be happy as stock continues to impress, up 5.4% over the past week

3 months ago
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• Given the large stake in the stock by institutions, Antero Resources’ stock price might be vulnerable to their trading decisions
• The top 10 shareholders own 51% of the company
• Insiders have been selling lately

A look at the shareholders of Antero Resources Corporation (NYSE:AR) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 84% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And as as result, institutional investors reaped the most rewards after the company’s stock price gained 5.4% last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 22%.

Let’s take a closer look to see what the different types of shareholders can tell us about Antero Resources.

What Does The Institutional Ownership Tell Us About Antero Resources?

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.

As you can see, institutional investors have a fair amount of stake in Antero Resources. 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. 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 Antero Resources, (below). Of course, keep in mind that there are other factors to consider, too.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don’t have a meaningful investment in Antero Resources. Looking at our data, we can see that the largest shareholder is FMR LLC with 15% of shares outstanding. For context, the second largest shareholder holds about 9.1% of the shares outstanding, followed by an ownership of 8.2% by the third-largest shareholder. In addition, we found that Paul Rady, the CEO has 4.3% of the shares allocated to their name.

We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 most recent data indicates that insiders own some shares in Antero Resources Corporation. It is a very large company, and board members collectively own US$416m worth of shares (at current prices). Most would say this shows a good alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

With a 10% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Antero Resources. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

It’s always worth thinking about the different groups who own shares in a company. But to understand Antero Resources better, we need to consider many other factors. Take risks for example – Antero Resources has 3 warning signs we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.…Read more by Simply Wall St

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