Each investor in Silver Lake Resources Limited (ASX: SLR) should know the most powerful shareholder groups. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. We also tend to see a decline in insider participation in companies that were previously public.
Silver Lake Resources isn’t huge, but it’s not particularly small either. It has a market capitalization of A$1.9 billion, which means it generally expects to see certain institutions listed on the share register. Our analysis of company ownership, below, shows that institutional investors have bought the company. We can zoom in on the different ownership groups, to learn more about Silver Lake Resources.
What does institutional ownership tell us about Silver Lake’s resources?
Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
Silver Lake Resources already has institutions on the share register. Indeed, they hold a respectable stake in the company. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out the past earnings trajectory of Silver Lake Resources (below). Of course, keep in mind that there are other factors to consider as well.
We note that hedge funds have no significant investment in Silver Lake Resources. Van Eck Associates Corporation is currently the company’s largest shareholder with 9.1% of the shares outstanding. Meanwhile, the second and third largest shareholders hold 5.6% and 4.8% of the outstanding shares respectively.
A closer look at our ownership data shows that the top 25 shareholders collectively own less than half of the ledger, suggesting a large group of small shareholders where no single shareholder has a majority.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to know their overall view on the future.
Insider Ownership of Silver Lake Resources
The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.
Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.
Our data suggests that insiders hold less than 1% of Silver Lake Resources Limited in their own name. We note, however, that insiders may have an indirect interest through a private company or other corporate structure. This is a fairly large company, so it would be possible for board members to hold a significant stake in the company, without holding much proportional interest. In this case, they hold approximately A$5.9 million worth of shares (at current prices). Arguably, recent purchases and sales are equally important to consider. You can click here to see if insiders have bought or sold.
General public property
The general public, consisting primarily of individual investors, collectively owns 56% of the shares of Silver Lake Resources. This level of ownership gives mainstream investors some power to influence key policy decisions such as board composition, executive compensation, and dividend payout ratio.
I find it very interesting to see who exactly owns a business. But to really get insight, we also need to consider other information. To this end, you should be aware of the 3 warning signs we spotted with Silver Lake Resources .
But finally it’s the future, not the past, which will determine the performance of the owners of this company. That’s why we think it’s advisable to take a look at this free report showing whether analysts are predicting a better future.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.