Stock Analysis

Eldorado Gold Corporation (TSE:ELD) institutional owners may be pleased with recent gains after 15% loss over the past year

  •  Updated
TSX:ELD
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If you want to know who really controls Eldorado Gold Corporation (TSE:ELD), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are institutions with 61% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

After a year of 15% losses, last week’s 15% gain would be welcomed by institutional investors as a likely sign that returns might start trending higher.

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

However if you'd rather see where the opportunities and risks are within ELD's industry, you can check out our analysis on the CA Metals and Mining industry.

ownership-breakdown
TSX:ELD Ownership Breakdown October 3rd 2022

What Does The Institutional Ownership Tell Us About Eldorado Gold?

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.

As you can see, institutional investors have a fair amount of stake in Eldorado Gold. 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 Eldorado Gold, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
TSX:ELD Earnings and Revenue Growth October 3rd 2022

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Our data indicates that hedge funds own 12% of Eldorado Gold. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Helikon Investments Limited is currently the largest shareholder, with 12% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.9% and 8.9% of the stock.

A closer look at our ownership figures suggests that the top 11 shareholders have a combined ownership of 51% implying that no single shareholder has a majority.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Eldorado Gold

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 most recent data indicates that insiders own less than 1% of Eldorado Gold Corporation. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own CA$12m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Eldorado Gold. 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.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Eldorado Gold is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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About TSX:ELD

Eldorado Gold

Eldorado Gold Corporation, together with its subsidiaries, engages in the mining, exploration, development, and sale of mineral products primarily in Turkey, Canada, Greece, and Romania.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation5
Future Growth4
Past Performance0
Financial Health3
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Undervalued with reasonable growth potential.