Odyssey Marine Exploration Inc (OMEX)

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What Does Odyssey Marine Exploration’s Ownership Structure Look Like?
Simply Wall St.
Joseph Holm
Simply Wall St.January 4, 2018


In this article, I’m going to take a look at Odyssey Marine Exploration Inc’s (NASDAQ:OMEX) latest ownership structure, a non-fundamental factor which is important, but remains a less discussed subject among investors. The impact of a company’s ownership structure affects both its short- and long-term performance. Since the same amount of capital coming from an activist institution and a passive mutual fund has different implications on corporate governance, it is a useful exercise to deconstruct OMEX’s shareholder registry. All data provided is as of the most recent financial year end.

See our latest analysis for Odyssey Marine Exploration

NasdaqCM:OMEX Ownership_summary Jan 5th 18View photos
NasdaqCM:OMEX Ownership_summary Jan 5th 18
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Institutional Ownership
Due to the big order sizes of institutional investors, a company’s shares can experience large, one-sided momentum, driven by high volume of shares removed from, or injected into, the market. A low institutional ownership of 8.78% puts OMEX on a list of companies that are not likely exposed to spikes in volatility resulting from institutional trading. Low coverage stocks like OMEX tend to be favourite picks of legendary investor Peter Lynch, who used to cash in on the rally supported by institutional buying as the stock gained popularity.

Insider Ownership
Insiders form another group of important ownership types as they manage the company’s operations and decide the best use of capital. Insider ownership has been linked to better alignment between management and shareholders. 14.71% ownership of OMEX insiders is large enough to make an impact on shareholder returns. In general, this level of insider ownership has negatively affected underperforming (consistently low PE ratio) companies and positively affected the companies that outperform (consistently high PE ratio). Another aspect of insider ownership is to learn about their recent transactions. Insider buying may be a sign of upbeat future expectations, however, selling doesn’t necessarily mean the opposite as insiders may be motivated by their personal financial needs.

NasdaqCM:OMEX Insider_trading Jan 5th 18View photos
NasdaqCM:OMEX Insider_trading Jan 5th 18
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General Public Ownership
The general public holds a substantial 76.39% stake in OMEX, making it a highly popular stock among retail investors. This size of ownership gives retail investors collective power in deciding on major policy decisions such as executive compensation, appointment of directors and acquisitions of businesses. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and potential acquisitions. This is a positive sign for an investor who wants to be involved in key decision-making of the company.

Private Company Ownership
Potential investors in OMEX should also look at another important group of investors: private companies, with a stake of 0.12%, who are primarily invested because of strategic and capital gain interests. However, an ownership of this size may be relatively insignificant, meaning that these shareholders may not have the potential to influence OMEX’s business strategy. Thus, investors not need worry too much about the consequences of these holdings.

What this means for you:
With a low level of institutional ownership, investors in OMEX need not worry about non-fundamental factors such as ownership structure causing large impact on stock prices. However, if you are building an investment case for OMEX, ownership structure alone should not dictate your decision to buy or sell the stock. Instead, you should be evaluating company-specific factors such as the intrinsic valuation, which is a key driver of Odyssey Marine Exploration’s share price. I highly recommend you to complete your research by taking a look at the following:

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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.