- Metals and Mining
Institutional investors have a lot riding on Ero Copper Corp. (TSE:ERO) with 60% ownership
- Given the large stake in the stock by institutions, Ero Copper's stock price might be vulnerable to their trading decisions
- The top 10 shareholders own 50% of the company
- Insiders own 14% of Ero Copper
A look at the shareholders of Ero Copper Corp. (TSE:ERO) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 60% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And as as result, institutional investors reaped the most rewards after the company's stock price gained 5.2% last week. One-year return to shareholders is currently 28% and last week’s gain was the icing on the cake.
Let's take a closer look to see what the different types of shareholders can tell us about Ero Copper.
Check out our latest analysis for Ero Copper
What Does The Institutional Ownership Tell Us About Ero Copper?
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 Ero Copper. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Ero Copper's earnings history below. Of course, the future is what really matters.
Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. It would appear that 6.6% of Ero Copper shares are controlled by hedge funds. 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. The company's largest shareholder is FMR LLC, with ownership of 7.8%. The second and third largest shareholders are Fidelity International Ltd and GMT Capital Corp., with an equal amount of shares to their name at 6.6%. In addition, we found that David Strang, the CEO has 6.1% of the shares allocated to their name.
We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Ero Copper
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 Ero Copper Corp.. Insiders own CA$294m worth of shares in the CA$2.1b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Ero Copper. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
It's always worth thinking about the different groups who own shares in a company. But to understand Ero Copper better, we need to consider many other factors. Take risks for example - Ero Copper has 3 warning signs (and 1 which is concerning) we think you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
Ero Copper Corp. engages in the exploration, development, and production of mining projects in Brazil.
Exceptional growth potential with excellent balance sheet.