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A look at the shareholders of Ardea Resources Limited (ASX:ARL) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.'
With a market capitalization of AU$72m, Ardea Resources is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions don't own many shares in the company. We can zoom in on the different ownership groups, to learn more about ARL.
Check out our latest analysis for Ardea Resources
What Does The Lack Of Institutional Ownership Tell Us About Ardea Resources?
We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.
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. Alternatively, there might be something about the company that has kept institutional investors away. Ardea Resources's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.
We note that hedge funds don't have a meaningful investment in Ardea Resources. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Ardea Resources
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board; and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board, themselves.
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.
It seems insiders own a significant proportion of Ardea Resources Limited. Insiders own AU$15m worth of shares in the AU$72m company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.