Sovereign Metals Limited's (ASX:SVM) largest shareholders are individual investors with 58% ownership, public companies own 16%
In This Article:
Key Insights
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The considerable ownership by individual investors in Sovereign Metals indicates that they collectively have a greater say in management and business strategy
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The top 25 shareholders own 42% of the company
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Insider ownership in Sovereign Metals is 12%
To get a sense of who is truly in control of Sovereign Metals Limited (ASX:SVM), 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 individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And public companies on the other hand have a 16% ownership in the company.
Let's delve deeper into each type of owner of Sovereign Metals, beginning with the chart below.
View our latest analysis for Sovereign Metals
What Does The Institutional Ownership Tell Us About Sovereign Metals?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Sovereign Metals 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Sovereign Metals' earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Sovereign Metals. Rio Tinto Group is currently the company's largest shareholder with 15% of shares outstanding. In comparison, the second and third largest shareholders hold about 7.8% and 2.9% of the stock. Julian Stephens, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Sovereign Metals
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.