If you want to know who really controls Stanmore Resources Limited (ASX:SMR), then you'll have to look at the makeup of its share registry. With 59% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While institutions, who own 16% shares weren’t spared from last week’s AU$207m market cap drop, private companies as a group suffered the maximum losses
Let's delve deeper into each type of owner of Stanmore Resources, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Stanmore 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 Stanmore Resources does have institutional investors; and they hold a good portion of the company's 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. 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 Stanmore Resources' historic earnings and revenue below, but keep in mind there's always more to the story.
ASX:SMR Earnings and Revenue Growth December 20th 2024
Our data indicates that hedge funds own 7.6% of Stanmore Resources. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. Looking at our data, we can see that the largest shareholder is Star Success Pte Ltd with 59% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 7.6% and 4.8% of the shares outstanding respectively, Regal Partners Limited and Matthew Latimore are the second and third largest shareholders. Matthew Latimore, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
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 are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Stanmore 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.
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.
We can see that insiders own shares in Stanmore Resources Limited. The insiders have a meaningful stake worth AU$129m. Most would see this as a real positive. Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 13% stake in Stanmore Resources. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
We can see that Private Companies own 59%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Stanmore Resources better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Stanmore Resources you should be aware of, and 1 of them doesn't sit too well with us.
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.
