Key Insights
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The considerable ownership by individual investors in Northern Minerals indicates that they collectively have a greater say in management and business strategy
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A total of 17 investors have a majority stake in the company with 50% ownership
Every investor in Northern Minerals Limited ( ASX:NTU ) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 50% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As a result, individual investors were the biggest beneficiaries of last week's 13% gain.
In the chart below, we zoom in on the different ownership groups of Northern Minerals.
See our latest analysis for Northern Minerals
What Does The Institutional Ownership Tell Us About Northern Minerals?
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.
Less than 5% of Northern Minerals is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
We note that hedge funds don't have a meaningful investment in Northern Minerals. Vastness Investment Group Limited is currently the company's largest shareholder with 6.8% of shares outstanding. Hong Kong Ying Tak Limited is the second largest shareholder owning 6.6% of common stock, and Real International Resources Limited holds about 6.5% of the company stock.
A closer look at our ownership figures suggests that the top 17 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.
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. 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 Northern Minerals
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
It seems insiders own a significant proportion of Northern Minerals Limited. Insiders have a AU$55m stake in this AU$344m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 50% stake in the company, and hence can't easily be ignored. 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.
Private Company Ownership
We can see that Private Companies own 31%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we've identified 4 warning signs for Northern Minerals (3 shouldn't be ignored) that you should be aware of.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company .
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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.
