Retail investors among Highlander Silver Corp.'s (TSE:HSLV) largest stockholders and were hit after last week's 10% price drop
Key Insights
- Significant control over Highlander Silver by retail investors implies that the general public has more power to influence management and governance-related decisions
- A total of 21 investors have a majority stake in the company with 43% ownership
- Insiders have been buying lately
Every investor in Highlander Silver Corp. (TSE:HSLV) should be aware of the most powerful shareholder groups. With 57% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While insiders who own 31% came under pressure after market cap dropped to CA$522m last week,retail investors took the most losses.
In the chart below, we zoom in on the different ownership groups of Highlander Silver.
View our latest analysis for Highlander Silver
What Does The Institutional Ownership Tell Us About Highlander Silver?
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.
Institutions have a very small stake in Highlander Silver. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.
It would appear that 7.2% of Highlander Silver 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. Richard Warke is currently the largest shareholder, with 24% of shares outstanding. Bromma Asset Management Inc. is the second largest shareholder owning 7.2% of common stock, and Daniel Earle holds about 4.0% of the company stock. Daniel Earle, 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 21 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.
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. 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 Highlander Silver
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 information suggests that insiders maintain a significant holding in Highlander Silver Corp.. Insiders own CA$161m worth of shares in the CA$522m company. 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 comprising of individual investors, collectively holds 57% of Highlander Silver shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Highlander Silver is showing 3 warning signs in our investment analysis , you should know about...
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.