In This Article:
Key Insights
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Significantly high institutional ownership implies Newmont's stock price is sensitive to their trading actions
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The top 24 shareholders own 50% of the company
Every investor in Newmont Corporation (NYSE:NEM) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are institutions with 74% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
After a year of 2.9% losses, last week’s 3.0% gain would be welcomed by institutional investors as a possible sign that returns might start trending higher.
Let's delve deeper into each type of owner of Newmont, beginning with the chart below.
View our latest analysis for Newmont
What Does The Institutional Ownership Tell Us About Newmont?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
We can see that Newmont does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Newmont's historic earnings and revenue below, but keep in mind there's always more to the story.
Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Newmont. Our data shows that The Vanguard Group, Inc. is the largest shareholder with 12% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 11% and 4.3%, of the shares outstanding, respectively.
Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 24 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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.