Do Institutions Own Balto Resources Ltd. (CVE:BAL.H) Shares?

If you want to know who really controls Balto Resources Ltd. (CVE:BAL.H), then you’ll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.

Balto Resources is not a large company by global standards. It has a market capitalization of CA$8.4m, which means it wouldn’t have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it’s seems that institutions are not on the share registry. We can zoom in on the different ownership groups, to learn more about Balto Resources.

Check out our latest analysis for Balto Resources

TSXV:BAL.H Ownership Summary, March 4th 2020
TSXV:BAL.H Ownership Summary, March 4th 2020

What Does The Lack Of Institutional Ownership Tell Us About Balto Resources?

We don’t tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it’s not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Balto Resources, for yourself, below.

TSXV:BAL.H Income Statement, March 4th 2020
TSXV:BAL.H Income Statement, March 4th 2020

Balto Resources is not owned by hedge funds. Donald Pepper is currently the largest shareholder, with 9.9% of shares outstanding. The second and third largest shareholders are William Diston and Sammy Cheng, holding 8.8% and 7.2%, respectively. Sammy Cheng also happens to hold the title of Member of the Board of Directors.

A deeper look at our ownership data shows that the top 3 shareholders collectively hold less than 50% of the register, suggesting a large group of small holders where no one share holder has a majority.

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. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Balto 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. 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.

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.

It seems insiders own a significant proportion of Balto Resources Ltd.. It has a market capitalization of just CA$8.4m, and insiders have CA$2.2m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public — mostly retail investors — own 74% of Balto Resources. With this size of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we’ve identified 5 warning signs for Balto Resources (4 are concerning) that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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