Stock Analysis

Institutions along with retail investors who hold considerable shares inMandalay Resources Corporation (TSE:MND) come under pressure; lose 13% of holdings value

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Key Insights

  • Mandalay Resources' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
  • 60% of the business is held by the top 4 shareholders
  • Insiders have been selling lately

A look at the shareholders of Mandalay Resources Corporation (TSE:MND) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 35% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions, who own 33% shares weren’t spared from last week’s CA$30m market cap drop, retail investors as a group suffered the maximum losses

Let's delve deeper into each type of owner of Mandalay Resources, beginning with the chart below.

Check out our latest analysis for Mandalay Resources

TSX:MND Ownership Breakdown March 17th 2023

What Does The Institutional Ownership Tell Us About Mandalay Resources?

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 Mandalay Resources 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. 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 Mandalay Resources' earnings history below. Of course, the future is what really matters.

TSX:MND Earnings and Revenue Growth March 17th 2023

Our data indicates that hedge funds own 19% of Mandalay Resources. 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. The company's largest shareholder is Ruffer LLP, with ownership of 19%. Meanwhile, the second and third largest shareholders, hold 19% and 12%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Mandalay Resources

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

We can report that insiders do own shares in Mandalay Resources Corporation. It has a market capitalization of just CA$204m, and insiders have CA$4.6m worth of shares, in their own names. It is good to see some investment by insiders, but we usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Mandalay Resources. 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

Private equity firms hold a 11% stake in Mandalay Resources. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Mandalay Resources better, we need to consider many other factors. Be aware that Mandalay Resources is showing 2 warning signs in our investment analysis , you should know about...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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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