Hedge funds investors have a lot riding on International Tower Hill Mines Ltd. (TSE:ITH) with 32% ownership
Key Insights
Given the large stake in the stock by institutions, International Tower Hill Mines' stock price might be vulnerable to their trading decisions
The top 3 shareholders own 58% of the company
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
If you want to know who really controls International Tower Hill Mines Ltd. (TSE:ITH), then you'll have to look at the makeup of its share registry. We can see that hedge funds own the lion's share in the company with 32% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
And last week, hedge funds investors ended up benefitting the most after the company hit CA$141m in market cap. One-year return to shareholders is currently 28% and last week’s gain was the icing on the cake.
Let's take a closer look to see what the different types of shareholders can tell us about International Tower Hill Mines.
See our latest analysis for International Tower Hill Mines
What Does The Institutional Ownership Tell Us About International Tower Hill Mines?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in International Tower Hill Mines. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 International Tower Hill Mines, (below). Of course, keep in mind that there are other factors to consider, too.
It looks like hedge funds own 32% of International Tower Hill Mines shares. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. The company's largest shareholder is Paulson & Co. Inc., with ownership of 32%. The Electrum Group LLC is the second largest shareholder owning 14% of common stock, and Sprott Asset Management LP holds about 13% of the company stock.
To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of International Tower Hill Mines
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. 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.
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 information suggests that International Tower Hill Mines Ltd. insiders own under 1% of the company. It appears that the board holds about CA$813k worth of stock. This compares to a market capitalization of CA$141m. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.
General Public Ownership
With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over International Tower Hill Mines. 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 Equity Ownership
With a stake of 14%, private equity firms could influence the International Tower Hill Mines board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.
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. For example, we've discovered 3 warning signs for International Tower Hill Mines (2 are significant!) that you should be aware of before investing here.
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
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.
