A look at the shareholders of Northern Star Resources Limited (ASX:NST) can tell us which group is more powerful. Institutions often own shares in larger companies, and we expect to see insiders owning a noticeable percentage of smaller ones. We also tend to see a decline in insider participation in companies that were previously public.
Northern Star Resources has a market capitalization of A$8.2 billion, so it’s too big to fly under the radar. We expect institutions and retail investors to own part of the business. Looking at our ownership group data (below), it appears that institutional investors have bought the company. Let’s dig deeper into each type of owner to learn more about Northern Star Resources.
See our latest analysis for Northern Star Resources
What does institutional ownership tell us about Northern Star resources?
Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
Northern Star Resources already has institutions on the share register. Indeed, they hold a respectable stake in the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out Northern Star Resources’ earnings history below. Of course, the future is what really matters.
We note that hedge funds have no significant investment in Northern Star Resources. BlackRock, Inc. is currently the company’s largest shareholder with 12% of the shares outstanding. Meanwhile, the second and third largest shareholders hold 5.7% and 5.3% of the outstanding shares respectively.
A closer look at our ownership data shows that the top 25 shareholders collectively own less than half of the ledger, suggesting a large group of small shareholders where no single shareholder has a majority.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to know their overall view on the future.
Insider ownership of Northern Star Resources
The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders hold certain shares of Northern Star Resources Limited. It’s a pretty big company, so it’s generally a positive to see a potentially meaningful alignment. In this case, they own around A$105 million worth of shares (at today’s prices). It’s good to see this level of investment by insiders. You can check here if these insiders have bought recently.
General public property
The general public, including retail investors, owns 50% of Northern Star Resources. This level of ownership gives mainstream investors some power to influence key policy decisions such as board composition, executive compensation, and dividend payout ratio.
While it is worth considering the different groups that own a business, there are other, even more important factors. For example, we have identified 3 warning signs for Northern Star Resources of which you should be aware.
If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.