Every investor in Genesis Minerals Limited (ASX:GMD) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 59% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And institutions on the other hand have a 21% ownership in the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.
Let's delve deeper into each type of owner of Genesis Minerals, beginning with the chart below.
Check out our latest analysis for Genesis Minerals
What Does The Institutional Ownership Tell Us About Genesis Minerals?
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.
Genesis Minerals already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Genesis Minerals, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Genesis Minerals. Paradice Investment Management Pty Ltd. is currently the company's largest shareholder with 8.1% of shares outstanding. In comparison, the second and third largest shareholders hold about 3.6% and 3.4% of the stock. Raleigh Finlayson, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Genesis Minerals
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Shareholders would probably be interested to learn that insiders own shares in Genesis Minerals Limited. As individuals, the insiders collectively own AU$35m worth of the AU$524m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public -- including retail investors -- own 59% of Genesis Minerals. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Private Company Ownership
We can see that Private Companies own 8.5%, of the shares on issue. 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.
Public Company Ownership
Public companies currently own 4.1% of Genesis Minerals stock. 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.
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 3 warning signs we've spotted with Genesis Minerals .
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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.
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