Could The Mandalay Resources Corporation (TSE:MND) Ownership Structure Tell Us Something Useful?

Every investor in Mandalay Resources Corporation (TSE:MND) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

With a market capitalization of CA$88m, Mandalay Resources is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Mandalay Resources.

Check out our latest analysis for Mandalay Resources

TSX:MND Ownership Summary, February 25th 2020
TSX:MND Ownership Summary, February 25th 2020

What Does The Institutional Ownership Tell Us About Mandalay 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.

As you can see, institutional investors own 32% of Mandalay Resources. 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. 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 Mandalay Resources’s earnings history, below. Of course, the future is what really matters.

TSX:MND Income Statement, February 25th 2020
TSX:MND Income Statement, February 25th 2020

It looks like hedge funds own 17% of Mandalay Resources shares. That’s interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Looking at our data, we can see that the largest shareholder is Ruffer LLP with 18% of shares outstanding. The second and third largest shareholders are GMT Capital Corp. and azValor Asset Management SGIIC, S.A.U., holding 17% and 11%, respectively.

Additionally, we found that 57% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Mandalay Resources

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. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Our information suggests that Mandalay Resources Corporation insiders own under 1% of the company. It appears that the board holds about CA$335k worth of stock. This compares to a market capitalization of CA$88m. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public holds a 39% stake in MND. 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 Equity Ownership

With a stake of 11%, private equity firms could influence the MND board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Mandalay Resources better, we need to consider many other factors. Case in point: We’ve spotted 4 warning signs for Mandalay Resources you should be aware of, and 1 of them is a bit concerning.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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.

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. Thank you for reading.