Hedge funds investors own a significant stake of 47% in Perpetua Resources Corp. (TSE:PPTA)
Key Insights
Significantly high institutional ownership implies Perpetua Resources' stock price is sensitive to their trading actions
A total of 3 investors have a majority stake in the company with 55% ownership
A look at the shareholders of Perpetua Resources Corp. (TSE:PPTA) can tell us which group is most powerful. With 47% stake, hedge funds possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Because hedge funds owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. Hence, having a considerable amount of institutional money invested in a company is often regarded as a desirable trait.
Let's delve deeper into each type of owner of Perpetua Resources, beginning with the chart below.
See our latest analysis for Perpetua Resources
What Does The Institutional Ownership Tell Us About Perpetua Resources?
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.
We can see that Perpetua 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Perpetua Resources' earnings history below. Of course, the future is what really matters.
Our data indicates that hedge funds own 47% of Perpetua Resources. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Paulson & Co. Inc. is currently the company's largest shareholder with 39% of shares outstanding. In comparison, the second and third largest shareholders hold about 8.3% and 7.9% of the stock.
A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.
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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Perpetua Resources
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
Our information suggests that Perpetua Resources Corp. insiders own under 1% of the company. It has a market capitalization of just CA$283m, and the board has only CA$1.0m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.
General Public Ownership
With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Perpetua Resources. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Perpetua Resources has 2 warning signs we think you should be aware of.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.
