Australia markets open in 7 hours 15 minutes
  • ALL ORDS

    7,030.90
    +125.60 (+1.82%)
     
  • AUD/USD

    0.6464
    -0.0040 (-0.62%)
     
  • ASX 200

    6,815.70
    +116.40 (+1.74%)
     
  • OIL

    88.06
    +1.54 (+1.78%)
     
  • GOLD

    1,718.20
    -12.30 (-0.71%)
     
  • BTC-AUD

    30,918.40
    -383.59 (-1.23%)
     
  • CMC Crypto 200

    452.23
    -6.17 (-1.35%)
     

Do Insiders Own Lots Of Shares In Capricorn Metals Ltd (ASX:CMM)?

·4-min read

The big shareholder groups in Capricorn Metals Ltd (ASX:CMM) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Capricorn Metals has a market capitalization of AU$1.4b, so we would expect some institutional investors to have noticed the stock. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about Capricorn Metals.

View our latest analysis for Capricorn Metals

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Capricorn Metals?

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.

As you can see, institutional investors have a fair amount of stake in Capricorn Metals. 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 Capricorn Metals' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
earnings-and-revenue-growth

Capricorn Metals is not owned by hedge funds. The company's largest shareholder is Van Eck Associates Corporation, with ownership of 10%. With 7.8% and 5.9% of the shares outstanding respectively, Paradice Investment Management Pty Ltd. and Mark Clark are the second and third largest shareholders. Mark Clark, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. Additionally, the company's CEO Kim Massey directly holds 0.6% of the total shares outstanding.

After doing some more digging, we found that the top 13 have the combined ownership of 52% in the company, suggesting that no single shareholder has significant control over 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Capricorn Metals

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Our information suggests that insiders maintain a significant holding in Capricorn Metals Ltd. Insiders own AU$205m worth of shares in the AU$1.4b company. 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 34% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 7.6%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Capricorn Metals better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Capricorn Metals you should be aware of, and 1 of them shouldn't be ignored.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.