Institutional investors are Dundee Precious Metals Inc.'s (TSE:DPM) biggest bettors and were rewarded after last week's CA$118m market cap gain

Key Insights

• Institutions' substantial holdings in Dundee Precious Metals implies that they have significant influence over the company's share price
• 51% of the business is held by the top 13 shareholders
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in Dundee Precious Metals Inc. (TSE:DPM) should be aware of the most powerful shareholder groups. We can see that institutions own the lion's share in the company with 64% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, institutional investors ended up benefitting the most after the company hit CA$2.6b in market cap. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 85%.

Let's delve deeper into each type of owner of Dundee Precious Metals, beginning with the chart below.

Check out our latest analysis for Dundee Precious Metals

What Does The Institutional Ownership Tell Us About Dundee Precious Metals?

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.

We can see that Dundee Precious Metals does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Dundee Precious Metals, (below). Of course, keep in mind that there are other factors to consider, too.

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Dundee Precious Metals. Looking at our data, we can see that the largest shareholder is BlackRock, Inc. with 13% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 7.6%, of the shares outstanding, respectively.

A closer look at our ownership figures suggests that the top 13 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Dundee Precious Metals

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. 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.

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 Dundee Precious Metals Inc. insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own CA$4.8m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 36% stake in Dundee Precious Metals. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Dundee Precious Metals is showing 1 warning sign in our investment analysis , you should know about...

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.

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.