Key Insights

• The considerable ownership by retail investors in TXO Partners indicates that they collectively have a greater say in management and business strategy

• 50% of the business is held by the top 9 shareholders

• Insiders have sold recently

A look at the shareholders of TXO Partners, L.P. (NYSE:TXO) can tell us which group is most powerful. With 43% stake, retail investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Meanwhile, individual insiders make up 28% of the company’s shareholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

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

As you can see, institutional investors have a fair amount of stake in TXO Partners. 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.

It looks like hedge funds own 10% of TXO Partners shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. With a 14% stake, CEO Bob Simpson is the largest shareholder. With 10% and 10% of the shares outstanding respectively, Global Endowment Management, LP and Keith Hutton are the second and third largest shareholders. Interestingly, the third-largest shareholder, Keith Hutton is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

We did some more digging and found that 9 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. 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 TXO Partners, L.P.. Insiders have a US$157m stake in this US$553m business. 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 43% stake in TXO Partners. 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 TXO Partners better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for TXO Partners (of which 1 is a bit unpleasant!) you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.