Significant control over Horizonte Minerals by private equity firms implies that the general public has more power to influence management and governance-related decisions
52% of the business is held by the top 3 shareholders
If you want to know who really controls Horizonte Minerals Plc (LON:HZM), then you'll have to look at the makeup of its share registry. We can see that private equity firms own the lion's share in the company with 34% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Institutions, on the other hand, account for 29% of the company's stockholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.
Let's take a closer look to see what the different types of shareholders can tell us about Horizonte Minerals.
What Does The Institutional Ownership Tell Us About Horizonte Minerals?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that Horizonte Minerals 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. 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 Horizonte Minerals' earnings history below. Of course, the future is what really matters.
AIM:HZM Earnings and Revenue Growth March 19th 2023
Hedge funds don't have many shares in Horizonte Minerals. Our data shows that La Mancha Holding S.à R.L. is the largest shareholder with 23% of shares outstanding. With 18% and 11% of the shares outstanding respectively, Glencore plc and Orion Resource Partners are the second and third largest shareholders.
To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Horizonte Minerals
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
We can see that insiders own shares in Horizonte Minerals Plc. In their own names, insiders own UK£6.5m worth of stock in the UK£378m company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
The general public-- including retail investors -- own 17% 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.
Private Equity Ownership
Private equity firms hold a 34% stake in Horizonte Minerals. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Public Company Ownership
Public companies currently own 18% of Horizonte Minerals stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
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. Take risks for example - Horizonte Minerals has 2 warning signs (and 1 which can't be ignored) we think you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this freereport on analyst forecasts.
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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