Theta Gold Mines Limited's (ASX:TGM) market cap touched AU$156m last week, benefiting both individual investors who own 50% as well as institutions

Key Insights

• Significant control over Theta Gold Mines by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 20 investors have a majority stake in the company with 50% ownership
• Insider ownership in Theta Gold Mines is 14%

If you want to know who really controls Theta Gold Mines Limited (ASX:TGM), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual investors gained the most after market cap touched AU$156m last week, while institutions who own 20% also benefitted.

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

Check out our latest analysis for Theta Gold Mines

What Does The Institutional Ownership Tell Us About Theta Gold Mines?

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.

Theta Gold Mines 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. 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 Theta Gold Mines' historic earnings and revenue below, but keep in mind there's always more to the story.

Theta Gold Mines is not owned by hedge funds. Our data shows that Zenith (Hk) Holding Limited is the largest shareholder with 6.0% of shares outstanding. For context, the second largest shareholder holds about 5.9% of the shares outstanding, followed by an ownership of 4.9% by the third-largest shareholder.

After doing some more digging, we found that the top 20 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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 Theta Gold Mines

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders maintain a significant holding in Theta Gold Mines Limited. Insiders own AU$22m worth of shares in the AU$156m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 50% stake in Theta Gold Mines. 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 16%, 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Theta Gold Mines better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Theta Gold Mines you should be aware of, and 3 of them make us uncomfortable.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.