Could Globex Mining Enterprises Inc.’s (TSE:GMX) Investor Composition Influence The Stock Price?

The big shareholder groups in Globex Mining Enterprises Inc. (TSE:GMX) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.

Globex Mining Enterprises is not a large company by global standards. It has a market capitalization of CA$19m, which means it wouldn’t have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions don’t own many shares in the company. Let’s take a closer look to see what the different types of shareholder can tell us about GMX.

Check out our latest analysis for Globex Mining Enterprises

TSX:GMX Ownership Summary, April 24th 2019
TSX:GMX Ownership Summary, April 24th 2019

What Does The Institutional Ownership Tell Us About Globex Mining Enterprises?

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.

Institutions own less than 5% of Globex Mining Enterprises. That indicates that the company is on the radar of some funds, but it isn’t particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

TSX:GMX Income Statement, April 24th 2019
TSX:GMX Income Statement, April 24th 2019

We note that hedge funds don’t have a meaningful investment in Globex Mining Enterprises. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Globex Mining Enterprises

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems insiders own a significant proportion of Globex Mining Enterprises Inc.. Insiders have a CA$2.2m stake in this CA$19m business. 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, who are mostly retail investors, collectively hold 85% of Globex Mining Enterprises shares. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.