Stock Analysis

After losing 9.2% in the past year, K92 Mining Inc. (TSE:KNT) institutional owners must be relieved by the recent gain

Source: Shutterstock

Key Insights

  • Given the large stake in the stock by institutions, K92 Mining's stock price might be vulnerable to their trading decisions
  • 51% of the business is held by the top 18 shareholders
  • Insiders have been selling lately

A look at the shareholders of K92 Mining Inc. (TSE:KNT) can tell us which group is most powerful. With 56% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Institutional investors would probably welcome last week's 6.3% increase in share prices after a year of 9.2% losses as a sign that returns are likely to begin trending higher.

Let's take a closer look to see what the different types of shareholders can tell us about K92 Mining.

Check out our latest analysis for K92 Mining

TSX:KNT Ownership Breakdown March 16th 2023

What Does The Institutional Ownership Tell Us About K92 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.

K92 Mining already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 K92 Mining's earnings history below. Of course, the future is what really matters.

TSX:KNT Earnings and Revenue Growth March 16th 2023

Since institutional investors own more than half the issued stock, the board will likely have to pay attention to their preferences. Hedge funds don't have many shares in K92 Mining. Van Eck Associates Corporation is currently the company's largest shareholder with 9.8% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.0% and 5.3% of the stock. In addition, we found that John Lewins, the CEO has 1.4% of the shares allocated to their name.

After doing some more digging, we found that the top 18 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of K92 Mining

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Shareholders would probably be interested to learn that insiders own shares in K92 Mining Inc.. This is a big company, so it is good to see this level of alignment. Insiders own CA$74m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 40% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand K92 Mining better, we need to consider many other factors. For instance, we've identified 2 warning signs for K92 Mining 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.

Valuation is complex, but we're helping make it simple.

Find out whether K92 Mining is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis