Each investor in Lithium Power International Limited (ASX: LPI) should know the most powerful shareholder groups. Big companies usually have institutions as shareholders, and we usually see insiders owning shares in small companies. I like to see at least a little insider ownership. As Charlie Munger said “Show me the incentive and I’ll show you the result”.
With a market capitalization of A$241 million, Lithium Power International is a small cap stock, so it may not be well known to many institutional investors. In the graph below, we can see that the institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Lithium Power International.
What does institutional ownership tell us about Lithium Power International?
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.
Lithium Power International 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. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out the past earnings trajectory of Lithium Power International (below). Of course, keep in mind that there are other factors to consider as well.
Hedge funds don’t have a lot of shares in Lithium Power International. The company’s largest shareholder is Republic Investment Management Pte Ltd with a 7.7% stake. David Hannon is the second largest shareholder with 6.5% of the ordinary shares and Nero Resource Fund Pty Ltd owns approximately 5.0% of the company’s shares.
Looking at our ownership data, we found that 24 of the major shareholders collectively own less than 50% of the share register, implying that no single individual holds a majority stake.
Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. There is a little analyst coverage of the stock, but not much. So there is room for him to gain coverage.
Insider owned by Lithium Power International
The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.
Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.
Our information suggests that insiders hold a significant stake in Lithium Power International Limited. It has a market capitalization of just A$241 million and insiders hold A$28 million worth of shares in their own names. This may suggest that the founders still own a lot of shares. You can click here to see if they bought or sold.
General public property
The general public, who are usually individual investors, hold a substantial 52% stake in Lithium Power International, which suggests it is quite a popular stock. This level of ownership gives mainstream investors some power to influence key policy decisions such as board composition, executive compensation, and dividend payout ratio.
Private Company Ownership
It appears that private companies own 9.1% of the shares of Lithium Power International. It’s hard to draw conclusions from this fact alone, so it’s worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.
While it is worth considering the different groups that own a business, there are other, even more important factors. To do this, you need to find out about the 4 warning signs we spotted with Lithium Power International (including 1 which is a little worrying) .
But finally it’s the future, not the past, which will determine the performance of the owners of this company. That’s why we think it’s advisable to take a look at this free report showing whether analysts are predicting a better 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.