Aeris Resources Limited's (ASX:AIS) last week's 12% decline must have disappointed individual investors who have a significant stake

Key Insights

• Significant control over Aeris Resources by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 5 shareholders own 51% of the company
• Institutions own 12% of Aeris Resources

If you want to know who really controls Aeris Resources Limited (ASX:AIS), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 12% decline in share price, individual investors suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Aeris Resources.

Check out our latest analysis for Aeris Resources

What Does The Institutional Ownership Tell Us About Aeris 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.

We can see that Aeris Resources does have institutional investors; and they hold a good portion of the company's stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Aeris Resources, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Aeris Resources. The company's largest shareholder is Washington H. Soul Pattinson and Company Limited, with ownership of 31%. Meanwhile, the second and third largest shareholders, hold 8.5% and 4.8%, of the shares outstanding, respectively. Additionally, the company's CEO Willie Labuschagne directly holds 0.6% of the total shares outstanding.

On looking further, we found that 51% of the shares are owned by the top 5 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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Aeris Resources

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own some shares in Aeris Resources Limited. In their own names, insiders own AU$4.3m worth of stock in the AU$252m company. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 45% stake in the company, and hence can't easily be ignored. 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 9.5%, of the Aeris Resources stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

It appears to us that public companies own 32% of Aeris Resources. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Aeris Resources better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Aeris Resources (including 1 which doesn't sit too well with us) .

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.

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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.