To get a sense of who is truly in control of Lithium Chile Inc. (CVE:LITH), it is important to understand the ownership structure of the business.With 51% stake, individual investors possess the maximum shares in the company.Put another way, the group faces the maximum upside potential (or downside risk).
In the chart below, we zoom in on the different ownership groups of Lithium Chile.
What Does The Lack Of Institutional Ownership Tell Us About Lithium Chile?
Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.
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.It is also possible that fund managers don't own the stock because they aren't convinced it will perform well.Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Lithium Chile, for yourself, below.
TSXV:LITH Earnings and Revenue Growth July 2nd 2024
Lithium Chile is not owned by hedge funds.Looking at our data, we can see that the largest shareholder is Chengxin Lithium Group Co., Ltd. with 18% of shares outstanding.Gator Capital Ltd. is the second largest shareholder owning 18% of common stock, and Albert Kroontje holds about 4.7% of the company stock.Albert Kroontje, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.In addition, we found that Steven Cochrane, the CEO has 1.6% of the shares allocated to their name.
Our studies suggest that the top 10 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing.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 Lithium Chile
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our information suggests that insiders maintain a significant holding in Lithium Chile Inc..Insiders own CA$17m worth of shares in the CA$141m company.This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public -- including retail investors -- own 51% of Lithium Chile.With this amount 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 vote on acquisitions or mergers that may not improve profitability.
Private Company Ownership
We can see that Private Companies own 18%, of the shares on issue.Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Public Company Ownership
Public companies currently own 18% of Lithium Chile stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
