International Tower Hill Mines Ltd.'s (TSE:ITH) one-year returns climbed after last week's 13% gain, hedge funds investors must be happy

Key Insights

• Institutions' substantial holdings in International Tower Hill Mines implies that they have significant influence over the company's share price
• The top 3 shareholders own 58% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of International Tower Hill Mines Ltd. (TSE:ITH) can tell us which group is most powerful. We can see that hedge funds own the lion's share in the company with 32% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, hedge funds investors ended up benefitting the most after the company hit CA$146m in market cap. The one-year return on investment is currently 4.1% and last week's gain would have been more than welcomed.

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

Check out our latest analysis for International Tower Hill Mines

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

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.

We can see that International Tower Hill Mines does have institutional investors; and they hold a good portion of the company's stock. 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 International Tower Hill Mines' historic earnings and revenue below, but keep in mind there's always more to the story.

Our data indicates that hedge funds own 32% 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 32% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 12% of the stock.

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.

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. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own less than 1% of International Tower Hill Mines Ltd.. It has a market capitalization of just CA$146m, and the board has only CA$751k worth of shares in their own names. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public-- including retail investors -- own 31% stake in the company, and hence can't easily be ignored. 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.

Private Equity Ownership

With a stake of 14%, private equity firms could influence the International Tower Hill Mines board. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with International Tower Hill Mines , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.