Key Insights

• Significant control over Mach Natural Resources by private equity firms implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is Bayou City Energy Management, LLC with a 63% stake
• 12% of Mach Natural Resources is held by insiders

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To get a sense of who is truly in control of Mach Natural Resources LP (NYSE:MNR), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 63% to be precise, is private equity firms. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, private equity firms endured the biggest losses as the stock fell by 3.4%.

In the chart below, we zoom in on the different ownership groups of Mach Natural Resources.

Check out our latest analysis for Mach Natural Resources

What Does The Institutional Ownership Tell Us About Mach Natural Resources?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Mach Natural Resources already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Mach Natural Resources, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Mach Natural Resources. The company's largest shareholder is Bayou City Energy Management, LLC, with ownership of 63%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 11% and 1.9% of the shares outstanding respectively, Tom Ward and American Century Investment Management Inc are the second and third largest shareholders. Tom Ward, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Mach Natural Resources

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 Mach Natural Resources LP. It is very interesting to see that insiders have a meaningful US$181m stake in this US$1.6b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Mach Natural Resources. 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

Private equity firms hold a 63% stake in Mach Natural Resources. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 3 warning signs for Mach Natural Resources (2 can't be ignored!) that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.