Institutional investors are IAMGOLD Corporation's (TSE:IMG) biggest bettors and were rewarded after last week's CA$828m market cap gain

Key Insights

• Significantly high institutional ownership implies IAMGOLD's stock price is sensitive to their trading actions
• A total of 25 investors have a majority stake in the company with 46% ownership
• Recent purchases by insiders

To get a sense of who is truly in control of IAMGOLD Corporation (TSE:IMG), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 47% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Last week’s 9.3% gain means that institutional investors were on the positive end of the spectrum even as the company has shown strong longer-term trends. One-year return to shareholders is currently 88% 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 IAMGOLD.

View our latest analysis for IAMGOLD

What Does The Institutional Ownership Tell Us About IAMGOLD?

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 IAMGOLD. 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. 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 IAMGOLD, (below). Of course, keep in mind that there are other factors to consider, too.

IAMGOLD is not owned by hedge funds. Van Eck Associates Corporation is currently the largest shareholder, with 8.5% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.3% and 4.4% of the stock.

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

Insider Ownership Of IAMGOLD

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.

Our information suggests that IAMGOLD Corporation insiders own under 1% of the company. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CA$4.5m worth of shares (at current prices). 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

With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over IAMGOLD. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand IAMGOLD better, we need to consider many other factors. For instance, we've identified 2 warning signs for IAMGOLD (1 is significant) that you should be aware of.

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.

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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.