Danaos Corporation (NYSE:DAC) insiders have significant skin in the game with 47% ownership
Key Insights
Significant insider control over Danaos implies vested interests in company growth
The top 4 shareholders own 51% of the company
A look at the shareholders of Danaos Corporation (NYSE:DAC) can tell us which group is most powerful. We can see that individual insiders own the lion's share in the company with 47% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
So it follows, every decision made by insiders of Danaos regarding the company's future would be crucial to them.
Let's delve deeper into each type of owner of Danaos, beginning with the chart below.
See our latest analysis for Danaos
What Does The Institutional Ownership Tell Us About Danaos?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that Danaos does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Danaos' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Danaos. The company's CEO John Coustas is the largest shareholder with 46% of shares outstanding. In comparison, the second and third largest shareholders hold about 2.1% and 1.6% of the stock.
On looking further, we found that 51% 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.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Danaos
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders maintain a significant holding in Danaos Corporation. It is very interesting to see that insiders have a meaningful US$626m stake in this US$1.3b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Danaos. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Danaos (of which 1 doesn't sit too well with us!) 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.
