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Every investor in VRX Silica Limited (ASX:VRX) should be aware of the most powerful shareholder groups. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.’
VRX Silica is a smaller company with a market capitalization of AU$46m, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutions own shares in the company. Let’s take a closer look to see what the different types of shareholder can tell us about VRX.
View our latest analysis for VRX Silica
What Does The Institutional Ownership Tell Us About VRX Silica?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
We can see that VRX Silica does have institutional investors; and they hold 8.2% of the stock. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of VRX Silica, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don’t have many shares in VRX Silica. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of VRX Silica
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our most recent data indicates that insiders own a reasonable proportion of VRX Silica Limited. It has a market capitalization of just AU$46m, and insiders have AU$9.8m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.