Yahoo Finance 44% of Solaris Resources Inc. (TSE:SLS) is owned by insiders, and they've been buying recently
Key Insights
Solaris Resources' significant insider ownership suggests inherent interests in company's expansion
A total of 3 investors have a majority stake in the company with 53% ownership
To get a sense of who is truly in control of Solaris Resources Inc. (TSE:SLS), it is important to understand the ownership structure of the business. With 44% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
It's interesting to note that insiders have been buying shares recently. This might indicate that they expect share prices to rise in the near future.
In the chart below, we zoom in on the different ownership groups of Solaris Resources.
View our latest analysis for Solaris Resources
What Does The Institutional Ownership Tell Us About Solaris 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.
Solaris Resources already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Solaris Resources' earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in Solaris Resources. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Solaris Resources' case, its Top Key Executive, Richard Warke, is the largest shareholder, holding 39% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.3% and 4.1% of the stock. Interestingly, the third-largest shareholder, Daniel Earle is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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 is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Solaris 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.
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 Solaris Resources Inc.. It has a market capitalization of just CA$734m, and insiders have CA$324m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Solaris Resources. 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.
Public Company Ownership
Public companies currently own 3.0% of Solaris Resources stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Solaris Resources better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Solaris Resources (of which 1 is concerning!) you should know about.
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.
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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.
