In This Article:
Key Insights
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The considerable ownership by retail investors in NextSource Materials indicates that they collectively have a greater say in management and business strategy
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The top 9 shareholders own 49% of the company
If you want to know who really controls NextSource Materials Inc. (TSE:NEXT), then you'll have to look at the makeup of its share registry. With 51% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
While retail investors were the group that reaped the most benefits after last week’s 13% price gain, institutions also received a 48% cut.
Let's take a closer look to see what the different types of shareholders can tell us about NextSource Materials.
View our latest analysis for NextSource Materials
What Does The Institutional Ownership Tell Us About NextSource Materials?
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.
NextSource Materials already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 NextSource Materials' historic earnings and revenue below, but keep in mind there's always more to the story.
NextSource Materials is not owned by hedge funds. Vision Blue Resources Ltd. is currently the largest shareholder, with 48% of shares outstanding. Brett Whalen is the second largest shareholder owning 0.6% of common stock, and Marc Johnson holds about 0.3% of the company stock.
Our studies suggest that the top 9 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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. There is some analyst coverage of the stock, but it could still become more well known, with time.