International Tower Hill Mines Ltd.'s (TSE:ITH) large hedge funds owners must be happy as stock continues to impress, up 15% over the past week

Key Insights

• Given the large stake in the stock by institutions, International Tower Hill Mines' stock price might be vulnerable to their trading decisions
• 58% of the business is held by the top 3 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

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A look at the shareholders of International Tower Hill Mines Ltd. (TSE:ITH) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are hedge funds with 34% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, hedge funds investors ended up benefitting the most after the company hit CA$249m in market cap. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 89%.

Let's delve deeper into each type of owner of International Tower Hill Mines, beginning with the chart below.

See our latest analysis for International Tower Hill Mines

What Does The Institutional Ownership Tell Us About International Tower Hill Mines?

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.

International Tower Hill Mines already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 International Tower Hill Mines, (below). Of course, keep in mind that there are other factors to consider, too.

Our data indicates that hedge funds own 34% of International Tower Hill Mines. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Our data shows that Paulson & Co. Inc. is the largest shareholder with 34% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 14% and 10%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 58% stake.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of International Tower Hill Mines

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 less than 1% of International Tower Hill Mines Ltd.. It appears that the board holds about CA$1.2m worth of stock. This compares to a market capitalization of CA$249m. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in International Tower Hill Mines. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

Private equity firms hold a 14% stake in International Tower Hill Mines. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand International Tower Hill Mines better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for International Tower Hill Mines (of which 1 can't be ignored!) you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.