Key findings
-
Significant insider control over Fortress Minerals implies self-interest in company growth
-
71% of the company is owned by the two largest shareholders
-
Using data on past company performance and owner research, you can better estimate a company’s future performance
If you want to know who really controls Fortress Minerals Limited (Catalist:OAJ), you need to look at the composition of the share registry. With 47% of the shares, individual insiders own the most shares in the company. In other words, the group has the greatest upside potential (or downside risk).
With such a significant stake in the company, insiders would have a strong incentive to make value-enhancing decisions.
Let’s dive deeper into each of Fortress Minerals’ ownership types, starting with the table below.
Check out our latest analysis for Fortress Minerals
What does the lack of institutional ownership tell us about Fortress Minerals?
Institutional investors often avoid companies that are too small, too illiquid or too risky for their liking. However, it is unusual for larger companies to be without institutional investors.
There are many reasons why a company may not have institutions on the share registry. Institutions may find it difficult to purchase large amounts of shares if liquidity (the amount of shares traded each day) is low. If the company has not had to raise capital, institutions may lack the opportunity to build a position. Alternatively, there could be something about the company that is keeping institutional investors away. Fortress Minerals’ earnings and revenue track record (below) may not be compelling to institutional investors – or they simply haven’t looked closely at the company.
Hedge funds don’t own a lot of shares in Fortress Minerals. Looking at our data, we can see that the largest shareholder is CEO Yew Fei Chee with 41% of the shares outstanding. In comparison, the second and third largest shareholders hold about 30% and 7.2% of the shares, respectively.
A closer examination of the shareholder register revealed that two of the largest shareholders own a significant share of the company with a stake of 71%.
While studying institutional ownership of a company can enrich your research, it is also a good practice to research analyst recommendations to get a deeper understanding of a stock’s expected performance. There is a small amount of analyst coverage of the stock, but not much, so there is room for more coverage.
Insider ownership of Fortress Minerals
The definition of an insider may vary slightly in different countries, but members of the board of directors are always included. The company’s management is accountable to the board of directors, which should represent the interests of the shareholders. In particular, top managers are sometimes on the board of directors themselves.
I think insider ownership is generally a good thing. However, in some cases it makes it harder for other shareholders to hold the board accountable for decisions.
Our latest data shows that insiders own a significant amount of Fortress Minerals Limited. The market capitalization is just SGD139 million, and insiders own SGD65 million worth of shares in their own names. We’d say this shows alignment with shareholders, but it’s worth noting that the company is still quite small; some insiders may have started the company. You can click here to see if those insiders have been buying or selling.
Public property
The general public – including retail investors – owns 14% of the company’s shares and therefore cannot be easily ignored. While this level of ownership may not be enough to sway a political decision in their favour, they can still collectively influence company policy.
Private company ownership
According to our data, private companies own 8.0% of the company’s shares. This fact alone is difficult to draw conclusions from, so it’s worth investigating who owns these private companies. Sometimes insiders or other related parties have an interest in a public company’s shares through a separate private company.
Ownership of public companies
We can see that listed companies hold 30% of Fortress Minerals shares issued. This could be a strategic interest and the two companies may have related business interests. It could be that they have split. This holding is probably worth further investigation.
Next Steps:
It is always worth thinking about the different groups that own shares in a company. But to better understand Fortress Minerals, we need to consider many other factors. For example, we found 1 warning sign for Fortress Minerals that you should know.
If you’re like me, you might want to think about whether this company will grow or shrink. Luckily, you can check out this free report showing analyst forecasts for the future.
NB: The figures in this article are calculated using the last twelve months’ data, which refer to the 12-month period ending on the last day of the month in which the financial statements are dated. This may not match the figures in the annual report.
Do you have feedback on this article? Are you concerned about the content? Contact us directly from us. Alternatively, send an email to editorial-team (at) simplywallst.com.
This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.
