Institutions profited after Platinum Group Metals Ltd.'s (TSE:PTM) market cap rose CA$79m last week but individual investors profited the most

Key Insights

• The considerable ownership by individual investors in Platinum Group Metals indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 50% ownership
• Insiders have sold recently

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A look at the shareholders of Platinum Group Metals Ltd. (TSE:PTM) can tell us which group is most powerful. The group holding the most number of shares in the company, around 49% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Individual investors gained the most after market cap touched CA$435m last week, while institutions who own 25% also benefitted.

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

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. 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 Platinum Group Metals, (below). Of course, keep in mind that there are other factors to consider, too.

Platinum Group Metals is not owned by hedge funds. Hosken Consolidated Investments Limited is currently the largest shareholder, with 25% of shares outstanding. Franklin Resources, Inc. is the second largest shareholder owning 8.9% of common stock, and Kopernik Global Investors, LLC holds about 6.3% of the company stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Platinum Group Metals

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 has a market capitalization of just CA$435m, and the board has only CA$1.5m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 49% stake in Platinum Group Metals. 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.

Public Company Ownership

Public companies currently own 25% 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. To that end, you should learn about the 3 warning signs we've spotted with Platinum Group Metals (including 2 which don't sit too well with us) .

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.