The big shareholder groups in Vector Resources Limited (ASX:VEC) 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. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’
Vector Resources is not a large company by global standards. It has a market capitalization of AU$36m, 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. We can zoom in on the different ownership groups, to learn more about VEC.
Check out our latest analysis for Vector Resources
What Does The Institutional Ownership Tell Us About Vector Resources?
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.
As you can see, institutional investors own 5.6% of Vector Resources. 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 Vector Resources’s earnings history, below. Of course, the future is what really matters.
Vector Resources is not owned by hedge funds. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Vector Resources
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
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.
It seems insiders own a significant proportion of Vector Resources Limited. Insiders own AU$9m worth of shares in the AU$36m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
The general public — mostly retail investors — own 54% of Vector Resources . With this size of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.