Institutional investors are Guardian Metal Resources PLC's (LON:GMET) biggest bettors and were rewarded after last week's UK£25m market cap gain

Key Insights

• Given the large stake in the stock by institutions, Guardian Metal Resources' stock price might be vulnerable to their trading decisions
• 53% of the business is held by the top 4 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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Every investor in Guardian Metal Resources PLC (LON:GMET) should be aware of the most powerful shareholder groups. With 41% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And as as result, institutional investors reaped the most rewards after the company's stock price gained 17% last week. One-year return to shareholders is currently 296% and last week’s gain was the icing on the cake.

In the chart below, we zoom in on the different ownership groups of Guardian Metal Resources.

Check out our latest analysis for Guardian Metal Resources

What Does The Institutional Ownership Tell Us About Guardian Metal Resources?

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 Guardian Metal Resources 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 Guardian Metal Resources' earnings history below. Of course, the future is what really matters.

Guardian Metal Resources is not owned by hedge funds. Our data shows that UCAM Ltd is the largest shareholder with 28% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 15% and 5.8%, of the shares outstanding, respectively. Additionally, the company's CEO Oliver Friesen directly holds 0.6% of the total shares outstanding.

Our research also brought to light the fact that roughly 53% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Guardian Metal Resources

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Shareholders would probably be interested to learn that insiders own shares in Guardian Metal Resources PLC. As individuals, the insiders collectively own UK£16m worth of the UK£173m 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

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guardian Metal Resources. 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.

Private Company Ownership

It seems that Private Companies own 34%, of the Guardian Metal Resources stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 3 warning signs for Guardian Metal Resources (2 are significant!) that you should be aware of before investing here.

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.