Individual investors account for 52% of Lithium Power International Limited's (ASX:LPI) ownership, while private companies account for 30%
Simply Wall St
5 min read
Key Insights
Significant control over Lithium Power International by individual investors implies that the general public has more power to influence management and governance-related decisions
48% of the business is held by the top 22 shareholders
If you want to know who really controls Lithium Power International Limited (ASX:LPI), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual investors with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Private companies, on the other hand, account for 30% of the company's stockholders.
In the chart below, we zoom in on the different ownership groups of Lithium Power International.
What Does The Institutional Ownership Tell Us About Lithium Power International?
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.
Lithium Power International already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Lithium Power International's historic earnings and revenue below, but keep in mind there's always more to the story.
ASX:LPI Earnings and Revenue Growth July 31st 2023
Hedge funds don't have many shares in Lithium Power International. Minera Salar Blanco SpA is currently the largest shareholder, with 28% of shares outstanding. For context, the second largest shareholder holds about 3.8% of the shares outstanding, followed by an ownership of 3.6% by the third-largest shareholder. David Hannon, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.
A deeper look at our ownership data shows that the top 22 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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 is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of Lithium Power International
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. 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 Lithium Power International Limited. It has a market capitalization of just AU$189m, and insiders have AU$9.2m worth of shares, in their own names. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 52% stake in Lithium Power International, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Private Company Ownership
Our data indicates that Private Companies hold 30%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Lithium Power International better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Lithium Power International (of which 4 are concerning!) you should know about.
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.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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