Andean Precious Metals Corp.'s (CVE:APM) most bullish insider, CEO Alberto Morales must be pleased with the recent 13% gain

Key Insights

• Significant insider control over Andean Precious Metals implies vested interests in company growth
• 53% of the company is held by a single shareholder (Alberto Morales)
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Andean Precious Metals Corp. (CVE:APM) can tell us which group is most powerful. With 70% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit CA$161m market cap following a 13% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Andean Precious Metals.

See our latest analysis for Andean Precious Metals

What Does The Institutional Ownership Tell Us About Andean Precious 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.

Andean Precious Metals already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Andean Precious Metals' historic earnings and revenue below, but keep in mind there's always more to the story.

Andean Precious Metals is not owned by hedge funds. The company's CEO Alberto Morales is the largest shareholder with 53% of shares outstanding. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. With 15% and 5.5% of the shares outstanding respectively, Eric Sprott and Tidal Investments LLC are the second and third largest shareholders.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Andean Precious Metals

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems that insiders own more than half the Andean Precious Metals Corp. stock. This gives them a lot of power. That means they own CA$112m worth of shares in the CA$161m company. That's quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 21% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Andean Precious Metals better, we need to consider many other factors. For example, we've discovered 2 warning signs for Andean Precious Metals that you should be aware of before investing here.

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.