Institutional owners may take dramatic actions as Vitesse Energy, Inc.'s (NYSE:VTS) recent 6.5% drop adds to one-year losses

Key Insights

• Significantly high institutional ownership implies Vitesse Energy's stock price is sensitive to their trading actions
• 51% of the business is held by the top 11 shareholders
• Insider ownership in Vitesse Energy is 19%

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A look at the shareholders of Vitesse Energy, Inc. (NYSE:VTS) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are institutions with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And institutional investors endured the highest losses after the company's share price fell by 6.5% last week. This set of investors may especially be concerned about the current loss, which adds to a one-year loss of 13% for shareholders. Often called “market movers", institutions wield significant power in influencing the price dynamics of any stock. Hence, if weakness in Vitesse Energy's share price continues, institutional investors may feel compelled to sell the stock, which might not be ideal for individual investors.

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

View our latest analysis for Vitesse Energy

What Does The Institutional Ownership Tell Us About Vitesse Energy?

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 Vitesse Energy 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 Vitesse Energy, (below). Of course, keep in mind that there are other factors to consider, too.

Vitesse Energy is not owned by hedge funds. The Vanguard Group, Inc. is currently the largest shareholder, with 7.7% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.5% and 6.9%, of the shares outstanding, respectively. Joseph Steinberg, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. In addition, we found that Robert Gerrity, the CEO has 3.7% of the shares allocated to their name.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. 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 Vitesse Energy

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. 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.

Our most recent data indicates that insiders own a reasonable proportion of Vitesse Energy, Inc.. It has a market capitalization of just US$797m, and insiders have US$155m 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

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Vitesse Energy. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 7.5%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Vitesse Energy better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Vitesse Energy (of which 3 are concerning!) you should know about.

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.