Loncor Gold Inc.'s (TSE:LN) market cap up CA$14m last week, benefiting both retail investors who own 54% as well as insiders
Key Insights
- Loncor Gold's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- A total of 14 investors have a majority stake in the company with 46% ownership
- 20% of Loncor Gold is held by insiders
To get a sense of who is truly in control of Loncor Gold Inc. (TSE:LN), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 54% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While retail investors were the group that benefitted the most from last week’s CA$14m market cap gain, insiders too had a 20% share in those profits.
Let's take a closer look to see what the different types of shareholders can tell us about Loncor Gold.
View our latest analysis for Loncor Gold
What Does The Institutional Ownership Tell Us About Loncor Gold?
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.
As you can see, institutional investors have a fair amount of stake in Loncor Gold. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Loncor Gold's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Loncor Gold. Resolute Mining Limited is currently the largest shareholder, with 18% of shares outstanding. With 17% and 3.9% of the shares outstanding respectively, Arnold Kondrat and Goehring & Rozencwajg Associates, LLC are the second and third largest shareholders. Arnold Kondrat, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.
Our studies suggest that the top 14 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Loncor Gold
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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.
Our information suggests that insiders maintain a significant holding in Loncor Gold Inc.. Insiders have a CA$29m stake in this CA$143m 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 -- including retail investors -- own 54% of Loncor Gold. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Public Company Ownership
We can see that public companies hold 18% of the Loncor Gold shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Loncor Gold better, we need to consider many other factors. For example, we've discovered 3 warning signs for Loncor Gold that you should be aware of before investing here.
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.