Painful week for individual investors invested in Heliostar Metals Ltd. (CVE:HSTR) after 13% drop, institutions also suffered losses

Key Insights

• The considerable ownership by individual investors in Heliostar Metals indicates that they collectively have a greater say in management and business strategy
• The top 17 shareholders own 44% of the company
• Insiders have been buying lately

Every investor in Heliostar Metals Ltd. (CVE:HSTR) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 56% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

While the holdings of individual investors took a hit after last week’s 13% price drop, institutions with their 27% holdings also suffered.

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

View our latest analysis for Heliostar Metals

What Does The Institutional Ownership Tell Us About Heliostar Metals?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Heliostar 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 Heliostar Metals, (below). Of course, keep in mind that there are other factors to consider, too.

Heliostar Metals is not owned by hedge funds. The company's largest shareholder is Eric Sprott, with ownership of 13%. Euro Pacific Asset Management, LLC is the second largest shareholder owning 9.9% of common stock, and Franklin Resources, Inc. holds about 6.7% of the company stock. Additionally, the company's CEO Charles Funk directly holds 1.0% of the total shares outstanding.

A deeper look at our ownership data shows that the top 17 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Heliostar Metals

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. 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.

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.

Our information suggests that insiders maintain a significant holding in Heliostar Metals Ltd.. Insiders own CA$21m worth of shares in the CA$142m company. 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, who are usually individual investors, hold a substantial 56% stake in Heliostar Metals, suggesting it is a fairly popular stock. With this amount 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 vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Heliostar Metals better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Heliostar Metals (of which 2 don't sit too well with us!) you should know about.

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.