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The big shareholder groups in Rimfire Pacific Mining NL (ASX:RIM) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. 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$6.4m, Rimfire Pacific Mining 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 not on the share registry. We can zoom in on the different ownership groups, to learn more about RIM.

See our latest analysis for Rimfire Pacific Mining

What Does The Lack Of Institutional Ownership Tell Us About Rimfire Pacific Mining?

Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them.

There are multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to fund under management, so the institition does not bother to look closely at the company. On the other hand, it’s always possible that professional investors are avoiding a company because they don’t think it’s the best place for their money. Rimfire Pacific Mining’s earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.

We note that hedge funds don’t have a meaningful investment in Rimfire Pacific Mining. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Rimfire Pacific Mining

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. 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.

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.