Sierra Madre Gold and Silver Ltd.'s (CVE:SM) largest shareholders are retail investors who were rewarded as market cap surged CA$31m last week

Key Insights

• The considerable ownership by retail investors in Sierra Madre Gold and Silver indicates that they collectively have a greater say in management and business strategy
• The top 5 shareholders own 51% of the company
• Insiders have been buying lately

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A look at the shareholders of Sierra Madre Gold and Silver Ltd. (CVE:SM) can tell us which group is most powerful. With 45% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, retail investors benefitted the most after the company's market cap rose by CA$31m last week.

In the chart below, we zoom in on the different ownership groups of Sierra Madre Gold and Silver.

Check out our latest analysis for Sierra Madre Gold and Silver

What Does The Institutional Ownership Tell Us About Sierra Madre Gold and Silver?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Sierra Madre Gold and Silver does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Sierra Madre Gold and Silver's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Sierra Madre Gold and Silver. Our data shows that First Majestic Silver Corp. is the largest shareholder with 37% of shares outstanding. Commodity Capital AG is the second largest shareholder owning 5.6% of common stock, and Franklin Resources, Inc. holds about 3.7% of the company stock. Additionally, the company's CEO Alexander Langer directly holds 2.4% of the total shares outstanding.

To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 Sierra Madre Gold and Silver

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.

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 Sierra Madre Gold and Silver Ltd.. In their own names, insiders own CA$20m worth of stock in the CA$273m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 45% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Public Company Ownership

Public companies currently own 37% of Sierra Madre Gold and Silver 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Sierra Madre Gold and Silver better, we need to consider many other factors. Take risks for example - Sierra Madre Gold and Silver has 1 warning sign 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.