Wesdome Gold Mines Ltd.'s (TSE:WDO) market cap dropped CA$83m last week; individual investors who hold 52% were hit as were institutions
Key Insights
Wesdome Gold Mines' significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
47% of the business is held by the top 25 shareholders
To get a sense of who is truly in control of Wesdome Gold Mines Ltd. (TSE:WDO), 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 52% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While institutions, who own 48% shares weren’t spared from last week’s CA$83m market cap drop, retail investors as a group suffered the maximum losses
Let's delve deeper into each type of owner of Wesdome Gold Mines, beginning with the chart below.
View our latest analysis for Wesdome Gold Mines
What Does The Institutional Ownership Tell Us About Wesdome Gold Mines?
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.
Wesdome Gold Mines 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. 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 Wesdome Gold Mines' historic earnings and revenue below, but keep in mind there's always more to the story.
Wesdome Gold Mines is not owned by hedge funds. The company's largest shareholder is T. Rowe Price Group, Inc., with ownership of 12%. With 9.3% and 3.4% of the shares outstanding respectively, Van Eck Associates Corporation and Scotia Asset Management L.P. are the second and third largest shareholders.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Wesdome Gold Mines
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. 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.
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 most recent data indicates that insiders own less than 1% of Wesdome Gold Mines Ltd.. It seems the board members have no more than CA$3.5m worth of shares in the CA$1.1b company. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.
General Public Ownership
The general public, who are usually individual investors, hold a substantial 52% stake in Wesdome Gold Mines, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Wesdome Gold Mines .
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.
