Rusoro Mining Ltd.'s (CVE:RML) 20% gain last week benefited both retail investors who own 47% as well as insiders
Key Insights
The considerable ownership by retail investors in Rusoro Mining indicates that they collectively have a greater say in management and business strategy
A total of 5 investors have a majority stake in the company with 51% ownership
A look at the shareholders of Rusoro Mining Ltd. (CVE:RML) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While retail investors were the group that benefitted the most from last week’s CA$34m market cap gain, insiders too had a 28% share in those profits.
Let's delve deeper into each type of owner of Rusoro Mining, beginning with the chart below.
View our latest analysis for Rusoro Mining
What Does The Lack Of Institutional Ownership Tell Us About Rusoro Mining?
Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.
There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Rusoro Mining might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
Hedge funds don't have many shares in Rusoro Mining. Gold Fields Limited is currently the largest shareholder, with 24% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 5.9% of the stock. Note that the second and third-largest shareholders are also Chief Executive Officer and Member of the Board of Directors, respectively, meaning that the company's top shareholders are insiders.
Our research also brought to light the fact that roughly 51% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.
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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Rusoro Mining
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own a reasonable proportion of Rusoro Mining Ltd.. Insiders own CA$57m worth of shares in the CA$203m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 47% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
It appears to us that public companies own 24% of Rusoro Mining. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Rusoro Mining better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Rusoro Mining (of which 4 are significant!) you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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