Retail investors who have a significant stake must be disappointed along with institutions after Cornish Metals Inc.'s (CVE:CUSN) market cap dropped by CA$25m

Key Insights

• Cornish Metals' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 58% of the business is held by the top 2 shareholders
• Institutions own 29% of Cornish Metals

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To get a sense of who is truly in control of Cornish Metals Inc. (CVE:CUSN), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 31% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions, who own 29% shares weren’t spared from last week’s CA$25m market cap drop, retail investors as a group suffered the maximum losses

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

Check out our latest analysis for Cornish Metals

What Does The Institutional Ownership Tell Us About Cornish 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 Cornish Metals. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Cornish Metals, (below). Of course, keep in mind that there are other factors to consider, too.

It looks like hedge funds own 5.2% of Cornish Metals shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Our data shows that Vision Blue Resources Ltd. is the largest shareholder with 29% of shares outstanding. National Wealth Fund is the second largest shareholder owning 28% of common stock, and N. Reed holds about 5.4% of the company stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 58% stake.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Cornish 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.

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.

We can see that insiders own shares in Cornish Metals Inc.. In their own names, insiders own CA$9.9m worth of stock in the CA$169m company. This shows at least some alignment, but we usually like to see larger insider holdings. 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 31% stake in Cornish Metals. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

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. For example, we've discovered 2 warning signs for Cornish 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.