Yahoo Finance With 46% ownership in First Quantum Minerals Ltd. (TSE:FM), institutional investors have a lot riding on the business
Key Insights
Significantly high institutional ownership implies First Quantum Minerals' stock price is sensitive to their trading actions
51% of the business is held by the top 7 shareholders
Every investor in First Quantum Minerals Ltd. (TSE:FM) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 46% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And things are looking up for institutional investors after the company gained CA$1.2b in market cap last week. The one-year return on investment is currently 13% and last week's gain would have been more than welcomed.
Let's take a closer look to see what the different types of shareholders can tell us about First Quantum Minerals.
View our latest analysis for First Quantum Minerals
What Does The Institutional Ownership Tell Us About First Quantum 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.
First Quantum Minerals already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 First Quantum Minerals' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in First Quantum Minerals. Our data shows that Pangaea Investment Management Ltd. is the largest shareholder with 18% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 9.9%, of the shares outstanding, respectively.
We also observed that the top 7 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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 First Quantum Minerals
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. 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 First Quantum Minerals Ltd. insiders own under 1% of the company. However, it's possible that insiders might have an indirect interest through a more complex structure. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own CA$243m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 35% stake in First Quantum Minerals. 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
It seems that Private Companies own 18%, of the First Quantum Minerals stock. 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:
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. To that end, you should learn about the 2 warning signs we've spotted with First Quantum Minerals (including 1 which is a bit unpleasant) .
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
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