individual investors who own 38% along with institutions invested in TerraCom Limited (ASX:TER) saw increase in their holdings value last week
In This Article:
Key Insights
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The considerable ownership by individual investors in TerraCom indicates that they collectively have a greater say in management and business strategy
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The top 10 shareholders own 51% of the company
Every investor in TerraCom Limited (ASX:TER) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 38% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Individual investors gained the most after market cap touched AU$160m last week, while institutions who own 36% also benefitted.
In the chart below, we zoom in on the different ownership groups of TerraCom.
View our latest analysis for TerraCom
What Does The Institutional Ownership Tell Us About TerraCom?
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.
TerraCom already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 TerraCom, (below). Of course, keep in mind that there are other factors to consider, too.
It looks like hedge funds own 14% of TerraCom shares. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Regal Partners Limited is currently the largest shareholder, with 14% of shares outstanding. Bonython Coal No 1 Pty Limited, Asset Management Arm is the second largest shareholder owning 9.8% of common stock, and TIGA Trading Pty Ltd, Asset Management Arm holds about 7.3% of the company stock.
We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.
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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.