Key Insights
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Insiders appear to have a vested interest in Andean Precious Metals’ growth, as seen by their sizeable ownership
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Alberto Morales owns 53% of the company
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Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
If you want to know who really controls Andean Precious Metals Corp. (CVE:APM), then you’ll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 68% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, insiders were the biggest beneficiaries of last week’s 14% gain.
Let’s take a closer look to see what the different types of shareholders can tell us about Andean Precious Metals.
View our latest analysis for Andean Precious Metals
What Does The Institutional Ownership Tell Us About Andean Precious Metals?
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.
As you can see, institutional investors have a fair amount of stake in Andean Precious Metals. 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 Andean Precious Metals’ historic earnings and revenue below, but keep in mind there’s always more to the story.
We note that hedge funds don’t have a meaningful investment in Andean Precious Metals. With a 53% stake, CEO Alberto Morales is the largest shareholder. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. With 14% and 5.3% of the shares outstanding respectively, Eric Sprott and Tidal Investments LLC are the second and third largest shareholders.
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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Andean Precious 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.
It seems that insiders own more than half the Andean Precious Metals Corp. stock. This gives them a lot of power. That means they own CA$97m worth of shares in the CA$142m company. That’s quite meaningful. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public– including retail investors — own 23% stake in the company, and hence can’t easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For instance, we’ve identified 2 warning signs for Andean Precious Metals that you should be aware of.
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.