Orion Minerals Limited's (ASX:ORN) market cap rose AU$24m last week; individual investors who hold 38% profited and so did insiders
Key Insights
- Orion Minerals' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- A total of 9 investors have a majority stake in the company with 51% ownership
- Insider ownership in Orion Minerals is 21%
A look at the shareholders of Orion Minerals Limited (ASX:ORN) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 38% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
While individual investors were the group that reaped the most benefits after last week’s 14% price gain, insiders also received a 21% cut.
Let's take a closer look to see what the different types of shareholders can tell us about Orion Minerals.
Check out our latest analysis for Orion Minerals
What Does The Institutional Ownership Tell Us About Orion Minerals?
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.
As you can see, institutional investors have a fair amount of stake in Orion Minerals. 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. 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 Orion Minerals' earnings history below. Of course, the future is what really matters.
It would appear that 7.1% of Orion Minerals shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. The company's largest shareholder is Tembo Capital Management Limited, with ownership of 13%. With 7.9% and 7.7% of the shares outstanding respectively, Thomas Borman and Philip Kotze are the second and third largest shareholders.
On further inspection, we found that more than half the company's shares are owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Orion Minerals
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.
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.
Our information suggests that insiders maintain a significant holding in Orion Minerals Limited. It has a market capitalization of just AU$196m, and insiders have AU$42m worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 38% stake in Orion Minerals. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Equity Ownership
With a stake of 13%, private equity firms could influence the Orion Minerals board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Private Company Ownership
We can see that Private Companies own 6.9%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Orion Minerals better, we need to consider many other factors. For example, we've discovered 4 warning signs for Orion Minerals (2 are potentially serious!) that you should be aware of before investing here.
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.