June 19, 2024
Investors

Hillgrove Resources Limited (ASX:HGO) stock most popular amongst retail investors who own 54%, while private companies hold 24%


Key Insights

  • Hillgrove Resources’ significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public

  • 46% of the business is held by the top 20 shareholders

  • Insiders own 10% of Hillgrove Resources

Every investor in Hillgrove Resources Limited (ASX:HGO) should be aware of the most powerful shareholder groups. With 54% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Private companies, on the other hand, account for 24% of the company’s stockholders.

Let’s take a closer look to see what the different types of shareholders can tell us about Hillgrove Resources.

View our latest analysis for Hillgrove Resources

ownership-breakdownownership-breakdown

ownership-breakdown

What Does The Institutional Ownership Tell Us About Hillgrove Resources?

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.

Less than 5% of Hillgrove Resources is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

earnings-and-revenue-growthearnings-and-revenue-growth

earnings-and-revenue-growth

Hedge funds don’t have many shares in Hillgrove Resources. The company’s largest shareholder is Freepoint Commodities Holdings LLC, with ownership of 20%. In comparison, the second and third largest shareholders hold about 10% and 3.0% of the stock. Furthermore, CEO Lachlan Wallace is the owner of 1.3% of the company’s shares.

On studying our ownership data, we found that 20 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Hillgrove 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.

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 most recent data indicates that insiders own a reasonable proportion of Hillgrove Resources Limited. Insiders have a AU$16m stake in this AU$157m business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 54% stake in Hillgrove Resources, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

We can see that Private Companies own 24%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it’s hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

Public companies currently own 10% of Hillgrove Resources stock. We can’t be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Hillgrove Resources better, we need to consider many other factors. Like risks, for instance. Every company has them, and we’ve spotted 2 warning signs for Hillgrove Resources (of which 1 is significant!) you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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