Individual investors who have a significant stake must be disappointed along with institutions after Spartan Resources Limited's (ASX:SPR) market cap dropped by AU$239m

Key Insights

• Significant control over Spartan Resources by individual investors implies that the general public has more power to influence management and governance-related decisions
• 52% of the business is held by the top 8 shareholders
• 28% of Spartan Resources is held by Institutions

If you want to know who really controls Spartan Resources Limited (ASX:SPR), then you'll have to look at the makeup of its share registry. With 40% 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 14% decrease in the stock price last week, individual investors suffered the most losses, but institutions who own 28% stock also took a hit.

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

See our latest analysis for Spartan Resources

What Does The Institutional Ownership Tell Us About Spartan 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.

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

Hedge funds don't have many shares in Spartan Resources. Looking at our data, we can see that the largest shareholder is Ramelius Resources Limited with 18% of shares outstanding. With 9.9% and 8.1% of the shares outstanding respectively, Tembo Capital Management Limited and 1832 Asset Management L.P. are the second and third largest shareholders. In addition, we found that Simon Lawson, the CEO has 1.1% of the shares allocated to their name.

On further inspection, we found that more than half the company's shares are owned by the top 8 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Spartan Resources

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

We can see that insiders own shares in Spartan Resources Limited. In their own names, insiders own AU$30m worth of stock in the AU$1.5b 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 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Spartan Resources. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 9.9%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Public Company Ownership

It appears to us that public companies own 18% of Spartan Resources. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Spartan Resources better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Spartan Resources you should be aware of, and 1 of them is a bit concerning.

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.