Australia markets closed
  • ALL ORDS

    7,418.60
    -29.00 (-0.39%)
     
  • AUD/USD

    0.6689
    -0.0064 (-0.94%)
     
  • ASX 200

    7,229.10
    -30.40 (-0.42%)
     
  • OIL

    74.19
    -2.09 (-2.74%)
     
  • GOLD

    1,750.40
    -3.60 (-0.21%)
     
  • BTC-AUD

    24,241.75
    -678.66 (-2.72%)
     
  • CMC Crypto 200

    380.07
    -2.58 (-0.67%)
     

Are Institutions Heavily Invested In Silver Lake Resources Limited's (ASX:SLR) Shares?

If you want to know who really controls Silver Lake Resources Limited (ASX:SLR), then you'll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Companies that used to be publicly owned tend to have lower insider ownership.

Silver Lake Resources has a market capitalization of AU$1.4b, so we would expect some institutional investors to have noticed the stock. In the chart below, we can see that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about Silver Lake Resources.

See our latest analysis for Silver Lake Resources

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Silver Lake Resources?

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.

Silver Lake Resources already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Silver Lake Resources' historic earnings and revenue below, but keep in mind there's always more to the story.

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

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Silver Lake Resources is not owned by hedge funds. Van Eck Associates Corporation is currently the company's largest shareholder with 11% of shares outstanding. For context, the second largest shareholder holds about 5.6% of the shares outstanding, followed by an ownership of 4.8% by the third-largest shareholder.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Silver Lake Resources

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that Silver Lake Resources Limited insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just AU$1.4b, and the board has only AU$4.2m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 48% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Silver Lake Resources. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Case in point: We've spotted 2 warning signs for Silver Lake Resources you should be aware of.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here