If you want to know who really controls Arc Minerals Limited (LON:ARCM), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.
With a market capitalization of UK£10.0m, Arc Minerals is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutions are not on the share registry. Let's delve deeper into each type of owner, to discover more about Arc Minerals.
Check out our latest analysis for Arc Minerals
What Does The Lack Of Institutional Ownership Tell Us About Arc Minerals?
Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Arc Minerals'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.
We note that hedge funds don't have a meaningful investment in Arc Minerals. Our data shows that Mushinge Mumena is the largest shareholder with 7.9% of shares outstanding. The second and third largest shareholders are Karl-Erik Von Bahr and Nicholas von Schirnding, holding 7.2% and 2.3%, respectively. Nicholas von Schirnding also happens to hold the title of Chairman of the Board.
On studying our ownership data, we found that 11 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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. 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 Arc Minerals
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.
Our most recent data indicates that insiders own a reasonable proportion of Arc Minerals Limited. Insiders have a UK£2.5m stake in this UK£10.0m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
The general public -- mostly retail investors -- own 75% of Arc Minerals. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 5 warning signs for Arc Minerals you should be aware of, and 2 of them are significant.
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
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.
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