Key Insights

• Given the large stake in the stock by institutions, St Barbara's stock price might be vulnerable to their trading decisions

• The top 10 shareholders own 52% of the company

• Insiders have been buying lately

To get a sense of who is truly in control of St Barbara Limited (ASX:SBM), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 58% to be precise, is institutions. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, institutional investors ended up benefitting the most after the company hit AU$225m in market cap. One-year return to shareholders is currently 45% and last week’s gain was the icing on the cake.

Let's take a closer look to see what the different types of shareholders can tell us about St Barbara.

See our latest analysis for St Barbara

What Does The Institutional Ownership Tell Us About St Barbara?

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 St Barbara 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. 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 St Barbara, (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. St Barbara is not owned by hedge funds. The company's largest shareholder is IPConcept Fund Management SA, with ownership of 9.5%. Meanwhile, the second and third largest shareholders, hold 9.2% and 5.4%, of the shares outstanding, respectively.

We did some more digging and found that 10 of the top shareholders account for roughly 52% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.