Retail investors who hold 54% of Magna Mining Inc. (CVE:NICU) gained 11%, institutions profited as well

Key Insights

• The considerable ownership by retail investors in Magna Mining indicates that they collectively have a greater say in management and business strategy
• The top 25 shareholders own 46% of the company
• 29% of Magna Mining is held by Institutions

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Every investor in Magna Mining Inc. (CVE:NICU) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 11% increase in the stock price last week, retail investors profited the most, but institutions who own 29% stock also stood to gain from the increase.

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

View our latest analysis for Magna Mining

What Does The Institutional Ownership Tell Us About Magna Mining?

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.

We can see that Magna Mining does have institutional investors; and they hold a good portion of the company's stock. 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 Magna Mining's historic earnings and revenue below, but keep in mind there's always more to the story.

It looks like hedge funds own 8.8% of Magna Mining shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. The company's largest shareholder is Dundee Resources Limited, with ownership of 20%. Meanwhile, the second and third largest shareholders, hold 8.8% and 4.9%, of the shares outstanding, respectively. Jason Jessup, 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 25 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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Magna Mining

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can report that insiders do own shares in Magna Mining Inc.. In their own names, insiders own CA$42m worth of stock in the CA$513m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public -- including retail investors -- own 54% of Magna Mining. 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 Magna Mining better, we need to consider many other factors. Take risks for example - Magna Mining has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.