Is Investigator Resources Limited's (ASX:IVR) Shareholder Ownership Skewed Towards Insiders?

By
Simply Wall St
Published
June 02, 2021
ASX:IVR
Source: Shutterstock

If you want to know who really controls Investigator Resources Limited (ASX:IVR), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Investigator Resources is a smaller company with a market capitalization of AU$152m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Investigator Resources.

See our latest analysis for Investigator Resources

ownership-breakdown
ASX:IVR Ownership Breakdown June 2nd 2021

What Does The Institutional Ownership Tell Us About Investigator Resources?

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 Investigator Resources. 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 Investigator Resources' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
ASX:IVR Earnings and Revenue Growth June 2nd 2021

Hedge funds don't have many shares in Investigator Resources. The company's largest shareholder is Jupiter Investment Management Limited, with ownership of 15%. Jupiter Fund Management Plc is the second largest shareholder owning 15% of common stock, and Citic Fund Management Co. Ltd. holds about 3.2% of the company stock.

Our studies suggest that the top 21 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. 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 Investigator Resources

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 most recent data indicates that insiders own some shares in Investigator Resources Limited. It has a market capitalization of just AU$152m, and insiders have AU$8.1m worth of shares, in their own names. This shows at least some alignment, but I usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public holds a substantial 58% stake in Investigator Resources, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

Our data indicates that Private Companies hold 4.6%, 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:

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. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Investigator Resources (of which 3 are significant!) you should know about.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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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