- Metals and Mining
Individual investors who have a significant stake must be disappointed along with institutions after Pilbara Minerals Limited's (ASX:PLS) market cap dropped by AU$929m
- Significant control over Pilbara Minerals by individual investors implies that the general public has more power to influence management and governance-related decisions
- The top 25 shareholders own 41% of the company
- Insiders have bought recently
A look at the shareholders of Pilbara Minerals Limited (ASX:PLS) can tell us which group is most powerful. With 57% stake, individual investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Following a 7.8% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 30% stock also took a hit.
Let's take a closer look to see what the different types of shareholders can tell us about Pilbara Minerals.
View our latest analysis for Pilbara Minerals
What Does The Institutional Ownership Tell Us About Pilbara Minerals?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Pilbara Minerals already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Pilbara Minerals' historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in Pilbara Minerals. The company's largest shareholder is Ganfeng Lithium Group Co., Ltd., with ownership of 5.8%. In comparison, the second and third largest shareholders hold about 5.6% and 5.3% of the stock.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Pilbara Minerals
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.
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 less than 1% of Pilbara Minerals Limited. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own AU$55m worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public -- including retail investors -- own 57% of Pilbara Minerals. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Public Company Ownership
Public companies currently own 9.8% of Pilbara Minerals 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.
It's always worth thinking about the different groups who own shares in a company. But to understand Pilbara Minerals better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Pilbara Minerals you should be aware of, and 1 of them can't be ignored.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
Pilbara Minerals Limited explores for, develops, and operates mineral resources in Australia.
Outstanding track record with flawless balance sheet.