New Pacific Metals Corp.'s (TSE:NUAG) market cap dropped CA$99m last week; Individual investors bore the brunt

Key Insights

• The considerable ownership by individual investors in New Pacific Metals indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 7 shareholders
• Institutions own 16% of New Pacific Metals

Every investor in New Pacific Metals Corp. (TSE:NUAG) should be aware of the most powerful shareholder groups. With 44% stake, individual investors 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).

And following last week's 4.9% decline in share price, individual investors suffered the most losses.

In the chart below, we zoom in on the different ownership groups of New Pacific Metals.

Check out our latest analysis for New Pacific Metals

What Does The Institutional Ownership Tell Us About New Pacific Metals?

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.

As you can see, institutional investors have a fair amount of stake in New Pacific Metals. 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 New Pacific Metals, (below). Of course, keep in mind that there are other factors to consider, too.

New Pacific Metals is not owned by hedge funds. The company's largest shareholder is Silvercorp Metals Inc., with ownership of 26%. With 12% and 7.3% of the shares outstanding respectively, Pan American Silver Corp. and Jupiter Fund Management Plc are the second and third largest shareholders.

We did some more digging and found that 7 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. 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 New Pacific Metals

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. 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.

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.

We can report that insiders do own shares in New Pacific Metals Corp.. It has a market capitalization of just CA$271m, and insiders have CA$3.4m 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

The general public, who are usually individual investors, hold a 44% stake in New Pacific Metals. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 38% of New Pacific Metals. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - New Pacific Metals has 2 warning signs we think you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.