ioneer Ltd (ASX:INR) most popular amongst individual investors who own 52% of the shares, institutions hold 15%
Key Insights
ioneer's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
The top 25 shareholders own 48% of the company
Every investor in ioneer Ltd (ASX:INR) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual investors with 52% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Institutions, on the other hand, account for 15% of the company's stockholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.
In the chart below, we zoom in on the different ownership groups of ioneer.
Check out our latest analysis for ioneer
What Does The Institutional Ownership Tell Us About ioneer?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in ioneer. 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. 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 ioneer's historic earnings and revenue below, but keep in mind there's always more to the story.
It looks like hedge funds own 12% of ioneer shares. 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 Centaurus Capital Limited with 12% of shares outstanding. With 7.0% and 4.8% of the shares outstanding respectively, Sibanye Stillwater Limited and The Vanguard Group, Inc. are the second and third largest shareholders. Furthermore, CEO Bernard Rowe is the owner of 3.1% of the company's shares.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of ioneer
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.
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.
We can report that insiders do own shares in ioneer Ltd. As individuals, the insiders collectively own AU$54m worth of the AU$703m company. Some would say this shows alignment of interests between shareholders and the board. But 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 52% stake in ioneer, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.
Private Company Ownership
It seems that Private Companies own 6.2%, of the ioneer stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Public Company Ownership
We can see that public companies hold 7.0% of the ioneer shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand ioneer better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for ioneer (of which 1 is a bit concerning!) you should know about.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.
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.
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