Sprott Inc. (TSE:SII) surges 7.4%; individual investors who own 57% shares profited along with institutions

Key Insights

• The considerable ownership by individual investors in Sprott indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 32% ownership
• Insiders have sold recently

A look at the shareholders of Sprott Inc. (TSE:SII) can tell us which group is most powerful. With 57% stake, individual investors possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While individual investors were the group that reaped the most benefits after last week’s 7.4% price gain, institutions also received a 36% cut.

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

Check out our latest analysis for Sprott

What Does The Institutional Ownership Tell Us About Sprott?

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.

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

Sprott is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO William George with 5.5% of shares outstanding. For context, the second largest shareholder holds about 3.9% of the shares outstanding, followed by an ownership of 3.1% by the third-largest shareholder.

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.

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 Sprott

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.

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.

We can see that insiders own shares in Sprott Inc.. The insiders have a meaningful stake worth CA$121m. Most would see this as a real positive. It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 57% of Sprott shares. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Sprott better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Sprott you should know about.

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.