The large shareholder groups of Genco Shipping & Trading Limited (NYSE: GNK) have power over the company. Insiders often own a large portion of younger, smaller companies, while larger companies tend to have institutions as shareholders. Companies that were previously publicly owned tend to have less insider ownership.

Genco Shipping & Trading has a market capitalization of US$900 million, so we expect some institutional investors to have taken notice of the stock. In the chart below, we can see that institutional investors have bought the company. We can zoom in on the different ownership groups, to learn more about Genco Shipping & Trading.

Check out our latest analysis for Genco Shipping & Trading

What does institutional ownership tell us about Genco Shipping & Trading?

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 see that Genco Shipping & Trading has many institutional investors; and they own a good part of the shares of the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Genco Shipping & Trading’s historical revenue and earnings below, but keep in mind there’s always more to tell.

Investors should note that institutions actually own more than half of the company, so they can collectively wield significant power. Hedge funds don’t have a lot of shares in Genco Shipping & Trading. Looking at our data, we can see that the major shareholder is FMR LLC with 15% of the shares outstanding. With 11% and 5.7% of the shares outstanding, respectively, Centerbridge Partners, LP and BlackRock, Inc. are the second and third largest shareholders. Additionally, the company’s CEO, John Wobensmith, directly owns 1.0% of the total shares outstanding.

We also observed that the top 10 shareholders represent more than half of the share register, with some small shareholders to balance the interests of the larger ones to some extent.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to know their overall view on the future.

Genco Shipping & Trading Insider Ownership

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Shareholders would probably be interested to learn that insiders hold shares of Genco Shipping & Trading Limited. In their own name, insiders hold $10 million worth of stock in the $900 million company. It’s good to see insider investing, but it might be worth checking to see if those insiders have been buying.

General public property

The general public, including retail investors, owns 21% of the company’s capital and therefore cannot be easily ignored. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Private equity ownership

The private equity firms hold an 11% stake in Genco Shipping & Trading. This suggests that they can influence key policy decisions. Some investors might be encouraged by this, as private equity is sometimes able to encourage strategies that help the market see the value of the company. Alternatively, these holders could exit the investment after making it public.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Genco Shipping & Trading, we need to consider many other factors. Be aware that Genco Shipping & Trading displays 3 warning signs in our investment analysis you should know…

If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month the financial statements are dated. This may not be consistent with the annual report figures for the full year.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.