Do Insiders Own Lots Of Shares In Matachewan Consolidated Mines, Limited (CVE:MCM.A)?

If you want to know who really controls Matachewan Consolidated Mines, Limited (CVE:MCM.A), then you’ll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. 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.

Matachewan Consolidated Mines is not a large company by global standards. It has a market capitalization of CA$1.4m, 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 institutional investors have not yet purchased shares. We can zoom in on the different ownership groups, to learn more about Matachewan Consolidated Mines.

See our latest analysis for Matachewan Consolidated Mines

TSXV:MCM.A Ownership Summary, February 17th 2020
TSXV:MCM.A Ownership Summary, February 17th 2020

What Does The Lack Of Institutional Ownership Tell Us About Matachewan Consolidated Mines?

We don’t tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it’s not particularly common.

There are multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to fund under management, so the institition does not bother to look closely at the company. On the other hand, it’s always possible that professional investors are avoiding a company because they don’t think it’s the best place for their money. Matachewan Consolidated Mines’s earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.

TSXV:MCM.A Income Statement, February 17th 2020
TSXV:MCM.A Income Statement, February 17th 2020

Hedge funds don’t have many shares in Matachewan Consolidated Mines. The company’s largest shareholder is McChip Resources Inc., with ownership of 33%, Next, we have Richard McCloskey and Edward Dumond as the second and third largest shareholders, holding 17% and 0.6%, of the shares outstanding, respectively. Note that they are also Chief Executive Officer and Member of the Board of Directors, respectively, meaning that the company’s top shareholders are insiders.

Further, we found that the top 3 shareholders have a combined ownership of 50% in the company, meaning that they are powerful enough to influence the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Matachewan Consolidated Mines

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 a reasonable proportion of Matachewan Consolidated Mines, Limited. It has a market capitalization of just CA$1.4m, and insiders have CA$247k worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 50% ownership, the general public have some degree of sway over MCM.A. 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.

Public Company Ownership

We can see that public companies hold 33%, of the MCM.A shares on issue. 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:

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. Case in point: We’ve spotted 2 warning signs for Matachewan Consolidated Mines you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

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