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Every investor in Liberty Gold Corp. (TSE:LGD) should be aware of the most powerful shareholder groups. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. 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.
Liberty Gold is not a large company by global standards. It has a market capitalization of CA$278m, which means it wouldn't have the attention of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Liberty Gold.
Check out our latest analysis for Liberty Gold
What Does The Institutional Ownership Tell Us About Liberty Gold?
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.
Liberty Gold 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. 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 Liberty Gold'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 Liberty Gold. Looking at our data, we can see that the largest shareholder is Van Eck Associates Corporation with 12% of shares outstanding. Franklin Resources, Inc. is the second largest shareholder owning 7.1% of common stock, and Invesco Ltd. holds about 4.3% of the company stock. In addition, we found that Calvin Everett, the CEO has 2.8% of the shares allocated to their name.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.