IsoEnergy Ltd.'s (TSE:ISO) market cap dropped CA$79m last week; Individual investors bore the brunt

Key Insights

• IsoEnergy's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 21 investors have a majority stake in the company with 50% ownership
• Institutional ownership in IsoEnergy is 16%

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A look at the shareholders of IsoEnergy Ltd. (TSE:ISO) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 50% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, individual investors as a group endured the highest losses last week after market cap fell by CA$79m.

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

View our latest analysis for IsoEnergy

What Does The Institutional Ownership Tell Us About IsoEnergy?

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

Hedge funds don't have many shares in IsoEnergy. Our data shows that NexGen Energy Ltd. is the largest shareholder with 31% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.9% and 3.1%, of the shares outstanding, respectively.

After doing some more digging, we found that the top 21 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of IsoEnergy

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.

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 less than 1% of IsoEnergy Ltd.. It appears that the board holds about CA$4.3m worth of stock. This compares to a market capitalization of CA$462m. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 50% stake in IsoEnergy, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Public Company Ownership

We can see that public companies hold 33% of the IsoEnergy shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that IsoEnergy is showing 3 warning signs in our investment analysis , and 1 of those is significant...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.