48.94 F
London
November 8, 2024
PI Global Investments
Hedge Funds

Great week for Perpetua Resources Corp. (TSE:PPTA) hedge funds investors after losing 16% over the previous year


Key Insights

  • Significantly high institutional ownership implies Perpetua Resources’ stock price is sensitive to their trading actions
  • The top 3 shareholders own 54% of the company
  • Insiders have been buying lately

Every investor in Perpetua Resources Corp. (TSE:PPTA) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are hedge funds with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Hedge funds investors would appreciate the 12% increase in share price last week, given their one-year losses have totalled a disappointing 16%.

In the chart below, we zoom in on the different ownership groups of Perpetua Resources.

Check out our latest analysis for Perpetua Resources

TSX:PPTA Ownership Breakdown March 2nd 2024

What Does The Institutional Ownership Tell Us About Perpetua Resources?

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.

We can see that Perpetua Resources does have institutional investors; and they hold a good portion of the company’s stock. 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 Perpetua Resources’ earnings history below. Of course, the future is what really matters.

TSX:PPTA Earnings and Revenue Growth March 2nd 2024

It looks like hedge funds own 46% of Perpetua Resources 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. The company’s largest shareholder is Paulson & Co. Inc., with ownership of 39%. Kopernik Global Investors, LLC is the second largest shareholder owning 8.4% of common stock, and Sun Valley Gold LLC holds about 7.3% of the company stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 54% stake.

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 is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Perpetua Resources

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that Perpetua Resources Corp. insiders own under 1% of the company. It seems the board members have no more than CA$1.3m worth of shares in the CA$253m 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 27% stake in Perpetua Resources. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

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. Like risks, for instance. Every company has them, and we’ve spotted 3 warning signs for Perpetua Resources (of which 2 don’t sit too well with us!) 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.

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

Find out whether Perpetua Resources 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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