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Every investor in Medusa Mining Limited (ASX:MML) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. 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.

Medusa Mining is not a large company by global standards. It has a market capitalization of AU$152m, 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. We can zoom in on the different ownership groups, to learn more about Medusa Mining.

See our latest analysis for Medusa Mining

What Does The Institutional Ownership Tell Us About Medusa Mining?

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.

As you can see, institutional investors have a fair amount of stake in Medusa Mining. 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. 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 Medusa Mining's historic earnings and revenue, below, but keep in mind there's always more to the story.

Our data indicates that hedge funds own 12% of Medusa Mining. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Ruffer LLP is currently the largest shareholder, with 16% of shares outstanding. In comparison, the second and third largest shareholders hold about 12% and 5.6% of the stock.

A closer look at our ownership figures suggests that the top 17 shareholders have a combined ownership of 50% implying that no one share holder has a majority.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.