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The big shareholder groups in Sunstone Metals Limited (ASX:STM) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.
Sunstone Metals is not a large company by global standards. It has a market capitalization of AU$32m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's delve deeper into each type of owner, to discover more about STM.
View our latest analysis for Sunstone Metals
What Does The Institutional Ownership Tell Us About Sunstone Metals?
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.
Sunstone Metals already has institutions on the share registry. Indeed, they own 11% of the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. 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 Sunstone Metals's earnings history, below. Of course, the future is what really matters.
Hedge funds don't have many shares in Sunstone Metals. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Sunstone Metals
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
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 Sunstone Metals Limited. Insiders own AU$5.2m worth of shares in the AU$32m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.