Metals Acquisition Limited's (NYSE:MTAL) institutional investors lost 6.2% last week but have benefitted from longer-term gains

Key Insights

• Significantly high institutional ownership implies Metals Acquisition's stock price is sensitive to their trading actions
• The top 10 shareholders own 51% of the company
• Recent sales by insiders

To get a sense of who is truly in control of Metals Acquisition Limited (NYSE:MTAL), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 35% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

No shareholder likes losing money on their investments, especially institutional investors who saw their holdings drop 6.2% in value last week. Still, the 10% one-year gains may have helped mitigate their overall losses. But they would probably be wary of future losses.

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

See our latest analysis for Metals Acquisition

What Does The Institutional Ownership Tell Us About Metals Acquisition?

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.

Metals Acquisition already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Metals Acquisition's historic earnings and revenue below, but keep in mind there's always more to the story.

It would appear that 8.2% of Metals Acquisition shares are controlled by hedge funds. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Glencore plc is currently the largest shareholder, with 13% of shares outstanding. BlackRock, Inc. is the second largest shareholder owning 8.6% of common stock, and Fourth Sail Capital LP holds about 8.2% of the company stock. Additionally, the company's CEO Michael James McMullen directly holds 2.4% of the total shares outstanding.

On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Metals Acquisition

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our most recent data indicates that insiders own some shares in Metals Acquisition Limited. This is a big company, so it is good to see this level of alignment. Insiders own US$36m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 33% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

It appears to us that public companies own 19% of Metals Acquisition. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Metals Acquisition better, we need to consider many other factors. Be aware that Metals Acquisition is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.