Yahoo Finance Painful week for individual investors invested in Piedmont Lithium Inc. (ASX:PLL) after 23% drop, institutions also suffered losses
Key Insights
The considerable ownership by individual investors in Piedmont Lithium indicates that they collectively have a greater say in management and business strategy
The top 25 shareholders own 45% of the company
To get a sense of who is truly in control of Piedmont Lithium Inc. (ASX:PLL), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 46% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While institutions, who own 44% shares weren’t spared from last week’s AU$58m market cap drop, individual investors as a group suffered the maximum losses
Let's take a closer look to see what the different types of shareholders can tell us about Piedmont Lithium.
See our latest analysis for Piedmont Lithium
What Does The Institutional Ownership Tell Us About Piedmont Lithium?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in Piedmont Lithium. 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 Piedmont Lithium's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Piedmont Lithium. BlackRock, Inc. is currently the company's largest shareholder with 7.3% of shares outstanding. With 5.6% and 5.4% of the shares outstanding respectively, LG Chem, Ltd. and The Vanguard Group, Inc. are the second and third largest shareholders. In addition, we found that Keith Phillips, the CEO has 0.7% of the shares allocated to their name.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Piedmont Lithium
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 most recent data indicates that insiders own some shares in Piedmont Lithium Inc.. As individuals, the insiders collectively own AU$5.2m worth of the AU$194m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 46% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
It appears to us that public companies own 5.6% of Piedmont Lithium. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
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 Piedmont Lithium (including 1 which is concerning) .
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.
