Advertisement
U.S. markets close in 5 hours 58 minutes
  • S&P 500

    5,253.50
    +5.01 (+0.10%)
     
  • Dow 30

    39,781.77
    +21.69 (+0.05%)
     
  • Nasdaq

    16,406.59
    +7.07 (+0.04%)
     
  • Russell 2000

    2,122.76
    +8.41 (+0.40%)
     
  • Crude Oil

    82.37
    +1.02 (+1.25%)
     
  • Gold

    2,229.00
    +16.30 (+0.74%)
     
  • Silver

    24.71
    -0.04 (-0.17%)
     
  • EUR/USD

    1.0815
    -0.0014 (-0.13%)
     
  • 10-Yr Bond

    4.2100
    +0.0140 (+0.33%)
     
  • GBP/USD

    1.2647
    +0.0009 (+0.07%)
     
  • USD/JPY

    151.2530
    +0.0070 (+0.00%)
     
  • Bitcoin USD

    70,831.09
    +859.61 (+1.23%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,964.50
    +32.52 (+0.41%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Individual investors account for 45% of Petra Diamonds Limited's (LON:PDL) ownership, while institutions account for 39%

A look at the shareholders of Petra Diamonds Limited (LON:PDL) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, institutions make up 39% of the company’s shareholders. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies.

Let's delve deeper into each type of owner of Petra Diamonds, beginning with the chart below.

See our latest analysis for Petra Diamonds

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Petra Diamonds?

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.

As you can see, institutional investors have a fair amount of stake in Petra Diamonds. 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 Petra Diamonds' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
earnings-and-revenue-growth

Our data indicates that hedge funds own 10.0% of Petra Diamonds. 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. Vontobel Asset Management AG is currently the company's largest shareholder with 15% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 10% and 10.0%, of the shares outstanding, respectively.

We did some more digging and found that 9 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Petra Diamonds

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. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our data suggests that insiders own under 1% of Petra Diamonds Limited in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It has a market capitalization of just UK£194m, and the board has only UK£153k worth of shares in their own names. 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

With a 45% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Petra Diamonds. 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

It seems that Private Companies own 5.5%, of the Petra Diamonds stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Petra Diamonds better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Petra Diamonds you should be aware of, and 1 of them doesn't sit too well with us.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here

Advertisement