Public companies among Mount Gibson Iron Limited's (ASX:MGX) largest shareholders, saw gain in holdings value after stock jumped 11% last week

Key Insights

• Significant control over Mount Gibson Iron by public companies implies that the general public has more power to influence management and governance-related decisions
• 59% of the business is held by the top 3 shareholders
• 13% of Mount Gibson Iron is held by Institutions

Every investor in Mount Gibson Iron Limited (ASX:MGX) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are public companies with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, public companies benefitted the most after the company's market cap rose by AU$55m last week.

Let's delve deeper into each type of owner of Mount Gibson Iron, beginning with the chart below.

See our latest analysis for Mount Gibson Iron

What Does The Institutional Ownership Tell Us About Mount Gibson Iron?

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.

Mount Gibson Iron already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Mount Gibson Iron, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Mount Gibson Iron. APAC Resources Limited is currently the company's largest shareholder with 37% of shares outstanding. Shoucheng Holdings Limited is the second largest shareholder owning 13% of common stock, and Paradise Investment Management Pty Ltd holds about 9.4% of the company stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 59% stake.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Mount Gibson Iron

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in Mount Gibson Iron Limited. As individuals, the insiders collectively own AU$6.5m worth of the AU$559m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Mount Gibson Iron. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 13%, of the shares on issue. 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.

Public Company Ownership

It appears to us that public companies own 51% of Mount Gibson Iron. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Mount Gibson Iron that you should be aware of.

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.