Key Insights

• The considerable ownership by retail investors in Nordic American Tankers indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 38% of the company
• 41% of Nordic American Tankers is held by Institutions

If you want to know who really controls Nordic American Tankers Limited (NYSE:NAT), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And institutions on the other hand have a 41% ownership in the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.

Let's delve deeper into each type of owner of Nordic American Tankers, beginning with the chart below.

See our latest analysis for Nordic American Tankers

What Does The Institutional Ownership Tell Us About Nordic American Tankers?

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 Nordic American Tankers does have institutional investors; and they hold a good portion of the company's stock. 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 Nordic American Tankers' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Nordic American Tankers. Dimensional Fund Advisors LP is currently the largest shareholder, with 5.8% of shares outstanding. For context, the second largest shareholder holds about 5.5% of the shares outstanding, followed by an ownership of 2.7% by the third-largest shareholder. Additionally, the company's CEO Herbjorn Hansson directly holds 2.0% of the total shares outstanding.

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 Nordic American Tankers

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Nordic American Tankers Limited. In their own names, insiders own US$21m worth of stock in the US$622m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 55% stake in Nordic American Tankers, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

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 Nordic American Tankers you should be aware of, and 1 of them is significant.

Ultimately the future is most important. You can access this free report 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.