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A look at the shareholders of Latrobe Magnesium Limited (ASX:LMG) can tell us which group is most powerful. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. 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.’
Latrobe Magnesium is a smaller company with a market capitalization of AU$12m, so it may still be flying under the radar of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutions are not on the share registry. Let’s take a closer look to see what the different types of shareholder can tell us about LMG.
Check out our latest analysis for Latrobe Magnesium
What Does The Lack Of Institutional Ownership Tell Us About Latrobe Magnesium?
Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them.
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. On the other hand, it’s always possible that professional investors are avoiding a company because they don’t think it’s the best place for their money. Latrobe Magnesium’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.
Latrobe Magnesium is not owned by hedge funds. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Latrobe Magnesium
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.
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.
Our most recent data indicates that insiders own a reasonable proportion of Latrobe Magnesium Limited. It has a market capitalization of just AU$12m, and insiders have AU$3.0m worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.