Talon Metals Corp. (TSE:TLO) stock most popular amongst retail investors who own 54%, while private equity firms hold 33%
Key Insights
Significant control over Talon Metals by retail investors implies that the general public has more power to influence management and governance-related decisions
The top 25 shareholders own 46% of the company
To get a sense of who is truly in control of Talon Metals Corp. (TSE:TLO), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 54% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Meanwhile, private equity firms make up 33% of the company’s shareholders.
In the chart below, we zoom in on the different ownership groups of Talon Metals.
Check out our latest analysis for Talon Metals
What Does The Institutional Ownership Tell Us About Talon Metals?
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.
Talon Metals already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Talon Metals' earnings history below. Of course, the future is what really matters.
Talon Metals is not owned by hedge funds. The company's largest shareholder is The Pallinghurst Group, with ownership of 17%. With 16% and 2.2% of the shares outstanding respectively, RCF Management, LLC and Warren Newfield are the second and third largest shareholders. Warren Newfield, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.
Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Talon Metals
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
We can report that insiders do own shares in Talon Metals Corp.. In their own names, insiders own CA$9.8m worth of stock in the CA$272m company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 54% of Talon Metals shares. 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 Equity Ownership
With a stake of 33%, private equity firms could influence the Talon Metals board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Talon Metals better, we need to consider many other factors. Take risks for example - Talon Metals has 5 warning signs (and 2 which are a bit unpleasant) we think you should know about.
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.
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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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