Insiders of Jaguar Mining Inc. (TSE:JAG) must be disappointed as stock fell 11% after recent purchases

Key Insights

• Jaguar Mining's significant insider ownership suggests inherent interests in company's expansion
• A total of 2 investors have a majority stake in the company with 55% ownership
• Recent purchases by insiders

A look at the shareholders of Jaguar Mining Inc. (TSE:JAG) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 46% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Notably, insiders have bought shares recently. However, with shares price down 11% last week, they must be disappointed.

In the chart below, we zoom in on the different ownership groups of Jaguar Mining.

View our latest analysis for Jaguar Mining

What Does The Institutional Ownership Tell Us About Jaguar Mining?

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.

We can see that Jaguar Mining 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. 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 Jaguar Mining, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Jaguar Mining. Eric Sprott is currently the company's largest shareholder with 46% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.0% and 0.3%, of the shares outstanding, respectively. Benjamin Guenther, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Jaguar Mining

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 most recent data indicates that insiders own a reasonable proportion of Jaguar Mining Inc.. Insiders own CA$95m worth of shares in the CA$205m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 45% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Jaguar Mining better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Jaguar Mining you should know about.

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.