Both retail investors who control a good portion of Metals X Limited (ASX:MLX) along with institutions must be dismayed after last week's 11% decrease

Key Insights

• The considerable ownership by retail investors in Metals X indicates that they collectively have a greater say in management and business strategy
• The top 7 shareholders own 51% of the company
• Institutions own 29% of Metals X

A look at the shareholders of Metals X Limited (ASX:MLX) can tell us which group is most powerful. The group holding the most number of shares in the company, around 41% to be precise, is retail investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 29% came under pressure after market cap dropped to AU$390m last week,retail investors took the most losses.

In the chart below, we zoom in on the different ownership groups of Metals X.

See our latest analysis for Metals X

What Does The Institutional Ownership Tell Us About Metals X?

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.

We can see that Metals X does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Metals X's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Metals X. Our data shows that APAC Resources Limited is the largest shareholder with 22% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.8% and 5.2% of the stock.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 Metals X

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.

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 Metals X Limited. In their own names, insiders own AU$14m worth of stock in the AU$390m company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Metals X. 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 4.9%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

Public companies currently own 22% of Metals X stock. 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. Take risks for example - Metals X has 2 warning signs we think you should be aware of.

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.