A look at the shareholders of Silver Lake Resources Limited (ASX:SLR) can tell us which group is more powerful. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. Companies that have been privatized tend to have low insider ownership.
Silver Lake Resources has a market capitalization of A$1.8 billion, so we expect some institutional investors to have taken notice of the stock. In the graph below, we can see that the institutions are visible on the share register. Let’s dig deeper into each type of owner to learn more about Silver Lake Resources.
See our latest analysis for Silver Lake Resources
What does institutional ownership tell us about Silver Lake’s resources?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.
As you can see, institutional investors own a sizeable portion of Silver Lake Resources. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see Silver Lake Resources’ historical revenue and earnings below, but keep in mind there’s always more to tell.
We note that hedge funds have no significant investment in Silver Lake Resources. Van Eck Associates Corporation is currently the largest shareholder, with 9.1% of the shares outstanding. With respectively 5.6% and 4.8% of the outstanding shares, Paradice Investment Management Pty Ltd. and BlackRock, Inc. are the second and third shareholders.
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 it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Silver Lake Resource Insider Ownership
The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders of Silver Lake Resources Limited own less than 1% of the company. But they may have an indirect interest through a corporate structure that we have not noted. It’s a fairly large company, so it would be possible for board members to hold a significant stake in the company, without holding much of a proportional interest. In this case, they hold approximately A$5.5 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 been buying or selling.
General public property
The general public, who are usually retail investors, have a substantial 56% stake in Silver Lake Resources, which suggests it is quite a popular stock. This level of ownership gives mainstream investors some power to influence key policy decisions such as board composition, executive compensation, and dividend payout ratio.
It is always useful to think about the different groups that own shares in a company. But to better understand Silver Lake Resources, we need to consider many other factors. Take risks for example – Silver Lake Resources has 2 warning signs we think you should know.
If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its 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.