Both retail investors who control a good portion of Founders Metals Inc. (CVE:FDR) along with institutions must be dismayed after last week's 13% decrease

Key Insights

• Founders Metals' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 17 investors have a majority stake in the company with 42% ownership
• Insider ownership in Founders Metals is 11%

We've discovered 3 warning signs about Founders Metals. View them for free.

To get a sense of who is truly in control of Founders Metals Inc. (CVE:FDR), it is important to understand the ownership structure of the business. With 58% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 13% decrease in the stock price last week, retail investors suffered the most losses, but institutions who own 31% stock also took a hit.

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

View our latest analysis for Founders Metals

What Does The Institutional Ownership Tell Us About Founders 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.

Founders Metals already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Founders Metals' historic earnings and revenue below, but keep in mind there's always more to the story.

Founders Metals is not owned by hedge funds. BlackRock, Inc. is currently the company's largest shareholder with 13% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 4.1% of the stock. Nicholas Stajduhar, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

Our studies suggest that the top 17 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.

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 Founders Metals

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Our most recent data indicates that insiders own a reasonable proportion of Founders Metals Inc.. Insiders have a CA$46m stake in this CA$440m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 58% of Founders Metals shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Founders Metals has 3 warning signs we think you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.