How Much Of DRDGOLD Limited (NYSE:DRD) Do Institutions Own?

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Simply Wall St

Thu, Jan 27, 2022, 3:07 AM 4 min read

The big shareholder groups in DRDGOLD Limited (NYSE:DRD) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. We also tend to see lower insider ownership in companies that were previously publicly owned.

DRDGOLD is not a large company by global standards. It has a market capitalization of US$690m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about DRDGOLD.

View our latest analysis for DRDGOLD

ownership-breakdown — NYSE:DRD Ownership Breakdown January 27th 2022

What Does The Institutional Ownership Tell Us About DRDGOLD?

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.

We can see that DRDGOLD does have institutional investors; and they hold a good portion of the company's stock. 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 DRDGOLD's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth — NYSE:DRD Earnings and Revenue Growth January 27th 2022

We note that hedge funds don't have a meaningful investment in DRDGOLD. The company's largest shareholder is Sibanye Stillwater Limited, with ownership of 51%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 8.0% of the shares outstanding, followed by an ownership of 3.6% by the third-largest 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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of DRDGOLD

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own less than 1% of DRDGOLD Limited. However, it's possible that insiders might have an indirect interest through a more complex structure. It has a market capitalization of just US$690m, and the board has only US$706k worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 20% stake in DRDGOLD. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

Public companies currently own 51% of DRDGOLD stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand DRDGOLD better, we need to consider many other factors. For example, we've discovered 3 warning signs for DRDGOLD (1 is concerning!) that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.