Probe Metals Inc.'s (CVE:PRB) 13% loss last week hit both individual investors who own 59% as well as institutions

By
Simply Wall St
Published
May 12, 2022
TSXV:PRB
Source: Shutterstock

If you want to know who really controls Probe Metals Inc. (CVE:PRB), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 59% 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 24% shares weren’t spared from last week’s CA$39m market cap drop, individual investors as a group suffered the maximum losses

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

View our latest analysis for Probe Metals

ownership-breakdown
TSXV:PRB Ownership Breakdown May 12th 2022

What Does The Institutional Ownership Tell Us About Probe 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.

We can see that Probe Metals does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Probe Metals' earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
TSXV:PRB Earnings and Revenue Growth May 12th 2022

Hedge funds don't have many shares in Probe Metals. The company's largest shareholder is Eldorado Gold Corporation, with ownership of 10%. 1832 Asset Management L.P. is the second largest shareholder owning 5.1% of common stock, and ASA Gold and Precious Metals Limited holds about 4.9% of the company stock. In addition, we found that David Alexander Palmer, the CEO has 1.6% of the shares allocated to their name.

A deeper look at our ownership data shows that the top 22 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Probe 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. 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.

We can see that insiders own shares in Probe Metals Inc.. In their own names, insiders own CA$18m worth of stock in the CA$269m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public -- including retail investors -- own 59% of Probe Metals. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Public Company Ownership

Public companies currently own 10% of Probe Metals stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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 4 warning signs for Probe Metals (2 make us uncomfortable!) that you should be aware of before investing here.

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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