A look at the shareholders of Emmerson Resources Limited (ASX:ERM) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.'

With a market capitalization of AU$62m, Emmerson Resources is a small cap stock, so it might not be well known by many institutional investors. Taking a look at our data on the ownership groups (below), it's seems that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholder can tell us about ERM.

View our latest analysis for Emmerson Resources

What Does The Institutional Ownership Tell Us About Emmerson 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.

We can see that Emmerson Resources does have institutional investors; and they hold 19% of the 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 Emmerson Resources's earnings history, below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Emmerson Resources. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Emmerson Resources

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

I can report that insiders do own shares in Emmerson Resources Limited. It has a market capitalization of just AU$62m, and insiders have AU$3.2m worth of shares, in their own names. This shows at least some alignment, but I usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.