How Much Of Palladium One Mining Inc. (CVE:PDM) Do Insiders Own?

A look at the shareholders of Palladium One Mining Inc. (CVE:PDM) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.

Palladium One Mining is not a large company by global standards. It has a market capitalization of CA$19m, 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 institutional investors have not yet purchased shares. We can zoom in on the different ownership groups, to learn more about Palladium One Mining.

Check out our latest analysis for Palladium One Mining

TSXV:PDM Ownership Summary, January 22nd 2020
TSXV:PDM Ownership Summary, January 22nd 2020

What Does The Lack Of Institutional Ownership Tell Us About Palladium One Mining?

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 are multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to fund under management, so the institition does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Palladium One Mining’s earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.

TSXV:PDM Income Statement, January 22nd 2020
TSXV:PDM Income Statement, January 22nd 2020

We note that hedge funds don’t have a meaningful investment in Palladium One Mining. Our data shows that Eric Sprott is the largest shareholder with 19% of shares outstanding. The second and third largest shareholders are Blair Naughty and Weyrauch And Associates Inc., holding 3.7% and 1.1%, respectively.

A deeper look at our ownership data shows that the top 7 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. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Palladium One 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our information suggests that insiders maintain a significant holding in Palladium One Mining Inc.. It has a market capitalization of just CA$19m, and insiders have CA$4.5m worth of shares in their own names. I 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 retail investors, hold a substantial 75% stake in PDM, suggesting it is a fairly popular stock. 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. Be aware that Palladium One Mining is showing 4 warning signs in our investment analysis , and 1 of those doesn’t sit too well with us…

If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.