Champion Iron Limited's (ASX:CIA) largest shareholders are individual investors with 36% ownership, institutions own 29%

Key Insights

• Champion Iron's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 50% of the business is held by the top 12 shareholders
• Insider ownership in Champion Iron is 12%

Every investor in Champion Iron Limited (ASX:CIA) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 36% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Institutions, on the other hand, account for 29% of the company's stockholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

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

Check out our latest analysis for Champion Iron

What Does The Institutional Ownership Tell Us About Champion Iron?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Champion Iron. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Champion Iron's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Champion Iron. Investissement Québec, Investment Arm is currently the company's largest shareholder with 8.4% of shares outstanding. William O’Keeffe is the second largest shareholder owning 8.3% of common stock, and WC Strategic Opportunity, L.P. holds about 8.1% of the company stock. William O’Keeffe, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 12 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Champion Iron

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 a reasonable proportion of Champion Iron Limited. It has a market capitalization of just AU$3.4b, and insiders have AU$398m worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Champion Iron. 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 an ownership of 8.4%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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.

Private Company Ownership

Our data indicates that Private Companies hold 16%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Champion Iron better, we need to consider many other factors. For example, we've discovered 1 warning sign for Champion Iron that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com