Are Institutions Heavily Invested In Perseus Mining Limited's (ASX:PRU) Shares?
The big shareholder groups in Perseus Mining Limited (ASX:PRU) have power over the company. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that have been privatized tend to have low insider ownership.
Perseus Mining isn't enormous, but it's not particularly small either. It has a market capitalization of AU$1.8b, which means it would generally expect to see some institutions on the share registry. In the chart below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about Perseus Mining.
Check out our latest analysis for Perseus Mining
What Does The Institutional Ownership Tell Us About Perseus Mining?
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.
We can see that Perseus Mining does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Perseus Mining's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Perseus Mining. Our data shows that Van Eck Associates Corporation is the largest shareholder with 9.7% of shares outstanding. The second and third largest shareholders are The Vanguard Group, Inc. and Dimensional Fund Advisors L.P., with an equal amount of shares to their name at 5.0%.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Perseus Mining
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 Perseus Mining Limited insiders own under 1% of the company. Keep in mind that it's a big company, and the insiders own AU$6.6m worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public -- mostly retail investors -- own 51% of Perseus Mining. With this size 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 decline an acquisition or merger that may not improve profitability.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Perseus Mining has 2 warning signs we think you should be aware of.
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.
This article by Simply Wall St is general in nature. 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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