Individual investors who have a significant stake must be disappointed along with institutions after Platinum Group Metals Ltd.'s (TSE:PTM) market cap dropped by CA$31m

Key Insights

• Platinum Group Metals' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 6 investors have a majority stake in the company with 50% ownership
• Recent sales by insiders

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Every investor in Platinum Group Metals Ltd. (TSE:PTM) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 46% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

While institutions, who own 28% shares weren’t spared from last week’s CA$31m market cap drop, individual investors as a group suffered the maximum losses

Let's delve deeper into each type of owner of Platinum Group Metals, beginning with the chart below.

Check out our latest analysis for Platinum Group Metals

What Does The Institutional Ownership Tell Us About Platinum Group Metals?

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.

As you can see, institutional investors have a fair amount of stake in Platinum Group 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. 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 Platinum Group Metals' earnings history below. Of course, the future is what really matters.

Platinum Group Metals is not owned by hedge funds. Our data shows that Hosken Consolidated Investments Limited is the largest shareholder with 26% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.7% and 6.7%, of the shares outstanding, respectively.

We also observed that the top 6 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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. 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 Platinum Group 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. 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 information suggests that Platinum Group Metals Ltd. insiders own under 1% of the company. It seems the board members have no more than CA$611k worth of shares in the CA$216m company. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 46% stake in Platinum Group 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

Public companies currently own 26% of Platinum Group Metals stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Platinum Group Metals better, we need to consider many other factors. Take risks for example - Platinum Group Metals has 1 warning sign we think you should be aware of.

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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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.