Institutional investors in Equinox Gold Corp. (TSE:EQX) lost 6.1% last week but have reaped the benefits of longer-term growth

Key Insights

• Institutions' substantial holdings in Equinox Gold implies that they have significant influence over the company's share price
• A total of 25 investors have a majority stake in the company with 49% ownership
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in Equinox Gold Corp. (TSE:EQX) should be aware of the most powerful shareholder groups. With 46% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Institutional investors was the group most impacted after the company's market cap fell to CA$3.7b last week. However, the 19% one-year return to shareholders may have helped lessen their pain. We would assume however, that they would be on the lookout for weakness in the future.

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

See our latest analysis for Equinox Gold

What Does The Institutional Ownership Tell Us About Equinox Gold?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Equinox Gold. 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 Equinox Gold'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 Equinox Gold. Orion Resource Partners (USA), L.P. is currently the largest shareholder, with 9.3% of shares outstanding. With 8.4% and 5.9% of the shares outstanding respectively, Van Eck Associates Corporation and Ross Beaty are the second and third largest shareholders. Ross Beaty, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

Our studies suggest that the top 25 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.

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 Equinox Gold

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can report that insiders do own shares in Equinox Gold Corp.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CA$227m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Equinox Gold. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 9.3% stake in Equinox Gold. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Equinox Gold better, we need to consider many other factors. Be aware that Equinox Gold is showing 3 warning signs in our investment analysis , and 1 of those can't be ignored...

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.

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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.