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London
June 20, 2024
PI Global Investments
Gold

Institutional investors are Kinross Gold Corporation’s (TSE:K) biggest bettors and were rewarded after last week’s CA$295m market cap gain


Key Insights

  • Significantly high institutional ownership implies Kinross Gold’s stock price is sensitive to their trading actions
  • A total of 25 investors have a majority stake in the company with 44% ownership
  • Insiders have been selling lately

A look at the shareholders of Kinross Gold Corporation (TSE:K) can tell us which group is most powerful. With 67% stake, institutions possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, institutional investors ended up benefitting the most after the company hit CA$9.7b in market cap. The one-year return on investment is currently 27% and last week’s gain would have been more than welcomed.

Let’s delve deeper into each type of owner of Kinross Gold, beginning with the chart below.

Check out our latest analysis for Kinross Gold

TSX:K Ownership Breakdown January 14th 2024

What Does The Institutional Ownership Tell Us About Kinross Gold?

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.

Kinross Gold 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 Kinross Gold’s earnings history below. Of course, the future is what really matters.

TSX:K Earnings and Revenue Growth January 14th 2024

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. Kinross Gold is not owned by hedge funds. Van Eck Associates Corporation is currently the largest shareholder, with 12% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.1% and 3.6%, of the shares outstanding, respectively.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Kinross Gold

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.

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.

Our data suggests that insiders own under 1% of Kinross Gold Corporation in their own names. It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own CA$73m worth of shares. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 32% stake in Kinross Gold. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We’ve spotted 3 warning signs for Kinross Gold you should be aware of, and 1 of them is potentially serious.

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.

Valuation is complex, but we’re helping make it simple.

Find out whether Kinross Gold is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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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