Institutional Investors Have a Lot Riding on Sable Offshore Corp. (NYSE:SOC) With 32% Ownership

Key Insights

Significantly high institutional ownership implies Sable Offshore's stock price is sensitive to their trading actions
52% of the business is held by the top 4 shareholders
Insiders have bought recently

A look at the shareholders of Sable Offshore Corp. (NYSE:SOC) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 32% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Last week's 6.3% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. One-year return to shareholders is currently 44% and last week's gain was the icing on the cake.

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

ownership-breakdown — NYSE:SOC Ownership Breakdown May 25th 2024

What Does The Institutional Ownership Tell Us About Sable Offshore?

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.

We can see that Sable Offshore does have institutional investors; and they hold a good portion of the company's stock. 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 Sable Offshore, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — NYSE:SOC Earnings and Revenue Growth May 25th 2024

It would appear that 19% of Sable Offshore shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. With a 17% stake, CEO James Flores is the largest shareholder. Meanwhile, the second and third largest shareholders, hold 15% and 13%, of the shares outstanding, respectively.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. 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 Sable Offshore

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 information suggests that insiders maintain a significant holding in Sable Offshore Corp.. Insiders own US$234m worth of shares in the US$804m 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

With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sable Offshore. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sable Offshore better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Sable Offshore you should be aware of, and 3 of them can't be ignored.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.