Key Insights
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Significant control over Grange Resources by private companies implies that the general public has more power to influence management and governance-related decisions
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The top 3 shareholders own 54% of the company
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18% of Grange Resources is held by Institutions
A look at the shareholders of Grange Resources Limited (ASX:GRR) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are private companies with 53% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Individual investors, on the other hand, account for 22% of the company’s stockholders.
In the chart below, we zoom in on the different ownership groups of Grange Resources.
Check out our latest analysis for Grange Resources
What Does The Institutional Ownership Tell Us About Grange Resources?
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 Grange Resources. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Grange Resources, (below). Of course, keep in mind that there are other factors to consider, too.
Grange Resources is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Shagang International (Australia) Pty Ltd with 26% of shares outstanding. In comparison, the second and third largest shareholders hold about 21% and 6.6% of the 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.
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. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Grange Resources
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.
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.
We can see that insiders own shares in Grange Resources Limited. As individuals, the insiders collectively own AU$37m worth of the AU$503m 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– including retail investors — own 22% 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.
Private Company Ownership
It seems that Private Companies own 53%, of the Grange Resources stock. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
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. Take risks for example – Grange Resources has 2 warning signs we think you should be aware of.
Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.
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.
