Liontown Resources Limited's (ASX:LTR) last week's 7.7% decline must have disappointed individual investors who have a significant stake
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Every investor in Liontown Resources Limited (ASX:LTR) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 60% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Following a 7.7% decrease in the stock price last week, individual investors suffered the most losses, but insiders who own 19% stock also took a hit.
Let's take a closer look to see what the different types of shareholders can tell us about Liontown Resources.
Check out our latest analysis for Liontown Resources
What Does The Institutional Ownership Tell Us About Liontown 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 have a fair amount of stake in Liontown Resources. 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 Liontown Resources' historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Liontown Resources. Timothy Rupert Goyder is currently the largest shareholder, with 15% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.5% and 4.0% of the stock.
A deeper look at our ownership data shows that the top 25 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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Liontown Resources
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.