Significant control over Platinum Group Metals by retail investors implies that the general public has more power to influence management and governance-related decisions
50% of the business is held by the top 5 shareholders
To get a sense of who is truly in control of Platinum Group Metals Ltd. (TSE:PTM), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 46% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 28% of the company's stockholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
In the chart below, we zoom in on the different ownership groups of Platinum Group Metals.
What Does The Institutional Ownership Tell Us About Platinum Group Metals?
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 Platinum Group Metals 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Platinum Group Metals, (below). Of course, keep in mind that there are other factors to consider, too.
TSX:PTM Earnings and Revenue Growth May 6th 2024
Hedge funds don't have many shares in Platinum Group Metals. The company's largest shareholder is Hosken Consolidated Investments Limited, with ownership of 26%. Franklin Resources, Inc. is the second largest shareholder owning 13% of common stock, and Norges Bank Investment Management holds about 7.0% of the company stock.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Platinum Group Metals
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 data suggests that insiders own under 1% of Platinum Group Metals Ltd. in their own names. It seems the board members have no more than CA$563k worth of shares in the CA$183m company. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 46% stake in Platinum Group Metals. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
We can see that public companies hold 26% of the Platinum Group Metals shares on issue. 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:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example - Platinum Group Metals has 3 warning signs (and 2 which don't sit too well with us) we think you should know about.
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.
