Both individual investors who control a good portion of Andean Silver Limited (ASX:ASL) along with institutions must be dismayed after last week's 14% decrease

Key Insights

• Significant control over Andean Silver by individual investors implies that the general public has more power to influence management and governance-related decisions
• 49% of the business is held by the top 21 shareholders
• Insider ownership in Andean Silver is 16%

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To get a sense of who is truly in control of Andean Silver Limited (ASX:ASL), 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 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 14% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 32% stock also took a hit.

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

View our latest analysis for Andean Silver

What Does The Institutional Ownership Tell Us About Andean Silver?

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 Andean Silver. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Andean Silver's historic earnings and revenue below, but keep in mind there's always more to the story.

Andean Silver is not owned by hedge funds. The company's largest shareholder is 1832 Asset Management L.P., with ownership of 8.9%. In comparison, the second and third largest shareholders hold about 8.6% and 7.5% of the stock. Furthermore, CEO Timothy Laneyrie is the owner of 0.7% of the company's shares.

A deeper look at our ownership data shows that the top 21 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Andean Silver

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 information suggests that insiders maintain a significant holding in Andean Silver Limited. It has a market capitalization of just AU$305m, and insiders have AU$49m 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

The general public -- including retail investors -- own 51% of Andean Silver. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Andean Silver better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Andean Silver you should be aware of, and 1 of them can't be ignored.

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.