PPX Mining Corp.’s (CVE:PPX) market cap dropped CA$26m last week; Retail investors bore the brunt

Key Insights

• PPX Mining’s significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 50% of the business is held by the top 4 shareholders
• Insiders have been selling lately

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If you want to know who really controls PPX Mining Corp. (CVE:PPX), then you’ll have to look at the makeup of its share registry. With 49% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 11% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 39% stock also took a hit.

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

See our latest analysis for PPX Mining

What Does The Institutional Ownership Tell Us About PPX Mining?

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.

As you can see, institutional investors have a fair amount of stake in PPX Mining. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see PPX Mining’s historic earnings and revenue below, but keep in mind there’s always more to the story.

Hedge funds don’t have many shares in PPX Mining. Looking at our data, we can see that the largest shareholder is Kari Nabeta with 28% of shares outstanding. With 12% and 9.7% of the shares outstanding respectively, Donald Smith & Co., Inc. and Humberto Takahashi are the second and third largest shareholders.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company’s decision-making.

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. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of PPX Mining

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.

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 PPX Mining Corp.. It has a market capitalization of just CA$221m, and insiders have CA$86m 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 have been buying or selling.

General Public Ownership

With a 49% ownership, the general public, mostly comprising of individual investors, have some degree of sway over PPX Mining. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we’ve spotted 4 warning signs for PPX Mining (of which 3 are a bit concerning!) you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.