Individual investors among GoviEx Uranium Inc.'s (CVE:GXU) largest stockholders and were hit after last week's 21% price drop

December 15, 2021
  •  Updated
April 09, 2022
TSXV:GXU
Source: Shutterstock

If you want to know who really controls GoviEx Uranium Inc. (CVE:GXU), 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 57% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While the holdings of individual investors took a hit after last week’s 21% price drop, insiders with their 12% also suffered.

Let's delve deeper into each type of owner of GoviEx Uranium, beginning with the chart below.

See our latest analysis for GoviEx Uranium

ownership-breakdown
TSXV:GXU Ownership Breakdown December 15th 2021

What Does The Institutional Ownership Tell Us About GoviEx Uranium?

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.

As you can see, institutional investors have a fair amount of stake in GoviEx Uranium. 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 GoviEx Uranium's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
TSXV:GXU Earnings and Revenue Growth December 15th 2021

Our data indicates that hedge funds own 10% of GoviEx Uranium. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Looking at our data, we can see that the largest shareholder is Denison Mines Corp. with 11% of shares outstanding. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 6.3% by the third-largest shareholder. Eric Krafft, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Our studies suggest that the top 20 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of GoviEx Uranium

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.

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 a reasonable proportion of GoviEx Uranium Inc.. It has a market capitalization of just CA$183m, and insiders have CA$22m worth of shares in their own names. 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, mostly comprising of individual investors, collectively holds 57% of GoviEx Uranium 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.

Public Company Ownership

It appears to us that public companies own 11% of GoviEx Uranium. 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:

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. For example, we've discovered 6 warning signs for GoviEx Uranium (3 shouldn't be ignored!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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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