Retail investors who hold 45% of Capricorn Metals Ltd (ASX:CMM) gained 5.0%, institutions profited as well

Key Insights

• Capricorn Metals' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 49% ownership
• Recent sales by insiders

To get a sense of who is truly in control of Capricorn Metals Ltd (ASX:CMM), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 45% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 5.0% increase in the stock price last week, retail investors profited the most, but institutions who own 36% stock also stood to gain from the increase.

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

Check out our latest analysis for Capricorn Metals

What Does The Institutional Ownership Tell Us About Capricorn Metals?

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 Capricorn Metals. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Capricorn Metals' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Capricorn Metals. The company's largest shareholder is Paradice Investment Management Pty Ltd., with ownership of 6.7%. Meanwhile, the second and third largest shareholders, hold 5.1% and 4.6%, of the shares outstanding, respectively. Mark Clark, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board. In addition, we found that Kim Massey, the CEO has 0.6% of the shares allocated to their name.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Capricorn Metals

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders maintain a significant holding in Capricorn Metals Ltd. Insiders own AU$215m worth of shares in the AU$1.7b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

With a 45% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Capricorn Metals. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 5.8%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Capricorn Metals you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.