Delta Lithium Limited's (ASX:DLI) top owners are retail investors with 35% stake, while 23% is held by public companies
editorial-team@simplywallst.com (Simply Wall St)
4 min read
Key Insights
The considerable ownership by retail investors in Delta Lithium indicates that they collectively have a greater say in management and business strategy
55% of the business is held by the top 4 shareholders
Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock
Every investor in Delta Lithium Limited (ASX:DLI) should be aware of the most powerful shareholder groups. With 35% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
And public companies on the other hand have a 23% ownership in the company.
Let's delve deeper into each type of owner of Delta Lithium, beginning with the chart below.
View our latest analysis for Delta Lithium
ASX:DLI Ownership Breakdown March 17th 2024
What Does The Institutional Ownership Tell Us About Delta Lithium?
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.
Delta Lithium already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Delta Lithium's earnings history below. Of course, the future is what really matters.
ASX:DLI Earnings and Revenue Growth March 17th 2024
Our data indicates that hedge funds own 10% of Delta Lithium. That catches my attention because hedge funds sometimes try to influence management, or bring about changes that will create near term value for shareholders. Looking at our data, we can see that the largest shareholder is Mineral Resources Limited with 23% of shares outstanding. With 11% and 11% of the shares outstanding respectively, Idemitsu Mt Ida Pty Ltd and Hancock Prospecting Pty Ltd 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.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Delta Lithium
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.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
We can see that insiders own shares in Delta Lithium Limited. As individuals, the insiders collectively own AU$3.2m worth of the AU$228m company. This shows at least some alignment, but we usually like to see larger insider holdings. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Delta Lithium. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Company Ownership
Our data indicates that Private Companies hold 22%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Public Company Ownership
It appears to us that public companies own 23% of Delta Lithium. 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 Delta Lithium better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Delta Lithium (of which 3 shouldn't be ignored!) you should know about.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.
