Institutions own 39% of Fortuna Silver Mines Inc. (TSE:FVI) shares but retail investors control 60% of the company
Key Insights
Fortuna Silver Mines' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
32% of the business is held by the top 25 shareholders
A look at the shareholders of Fortuna Silver Mines Inc. (TSE:FVI) can tell us which group is most powerful. The group holding the most number of shares in the company, around 60% to be precise, is retail investors. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 39% of the company's stockholders. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones.
Let's delve deeper into each type of owner of Fortuna Silver Mines, beginning with the chart below.
View our latest analysis for Fortuna Silver Mines
What Does The Institutional Ownership Tell Us About Fortuna Silver 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.
Fortuna Silver Mines already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Fortuna Silver Mines' earnings history below. Of course, the future is what really matters.
Fortuna Silver Mines is not owned by hedge funds. The company's largest shareholder is Van Eck Associates Corporation, with ownership of 11%. In comparison, the second and third largest shareholders hold about 2.8% and 2.5% of the stock. Additionally, the company's CEO Jorge A. Ganoza Durant directly holds 0.8% of the total shares outstanding.
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
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.
Insider Ownership Of Fortuna Silver Mines
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
We can report that insiders do own shares in Fortuna Silver Mines Inc.. The insiders have a meaningful stake worth CA$21m. 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 substantial 60% stake in Fortuna Silver Mines, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Fortuna Silver Mines better, we need to consider many other factors.
I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.
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.
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