MAG Silver Corp.'s (TSE:MAG) large institutional owners must be happy as stock continues to impress, up 4.4% over the past week
In This Article:
Key Insights
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Given the large stake in the stock by institutions, MAG Silver's stock price might be vulnerable to their trading decisions
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A total of 9 investors have a majority stake in the company with 51% ownership
To get a sense of who is truly in control of MAG Silver Corp. (TSE:MAG), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are institutions with 63% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And things are looking up for institutional investors after the company gained CA$93m in market cap last week. The gains from last week would have further boosted the one-year return to shareholders which currently stand at 42%.
In the chart below, we zoom in on the different ownership groups of MAG Silver.
Check out our latest analysis for MAG Silver
What Does The Institutional Ownership Tell Us About MAG Silver?
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 MAG Silver does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 MAG Silver, (below). Of course, keep in mind that there are other factors to consider, too.
Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Hedge funds don't have many shares in MAG Silver. Our data shows that BlackRock, Inc. is the largest shareholder with 16% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.5% and 9.0%, of the shares outstanding, respectively.
We did some more digging and found that 9 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.