Could The Aurcana Silver Corporation (CVE:AUN) Ownership Structure Tell Us Something Useful?

Simply Wall St

Sat, Jan 9, 2021, 11:49 PM 4 min read

The big shareholder groups in Aurcana Silver Corporation (CVE:AUN) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. We also tend to see lower insider ownership in companies that were previously publicly owned.

Aurcana Silver is not a large company by global standards. It has a market capitalization of CA$233m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about Aurcana Silver.

Check out our latest analysis for Aurcana Silver

ownership-breakdown — TSXV:AUN Ownership Breakdown January 10th 2021

What Does The Institutional Ownership Tell Us About Aurcana Silver?

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 Aurcana Silver does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Aurcana Silver's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — TSXV:AUN Earnings and Revenue Growth January 10th 2021

Aurcana Silver is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Lascaux Resource Capital, LLC with 37% of shares outstanding. Orion Mine Finance is the second largest shareholder owning 2.0% of common stock, and Dolefin SA holds about 1.5% of the company stock.

Our studies suggest that the top 13 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.

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 I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Aurcana Silver

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Shareholders would probably be interested to learn that insiders own shares in Aurcana Silver Corporation. As individuals, the insiders collectively own CA$2.8m worth of the CA$233m company. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are mostly retail investors, collectively hold 56% of Aurcana Silver shares. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Equity Ownership

Private equity firms hold a 37% stake in Aurcana Silver. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for Aurcana Silver you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free 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.

This article by Simply Wall St is general in nature. 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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