Painful week for individual investors invested in AMG Critical Materials N.V. (AMS:AMG) after 4.9% drop, institutions also suffered losses

Simply Wall St

Sun, Aug 13, 2023, 1:12 AM 4 min read

Key Insights

AMG Critical Materials' significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
43% of the business is held by the top 25 shareholders
Institutional ownership in AMG Critical Materials is 43%

A look at the shareholders of AMG Critical Materials N.V. (AMS:AMG) can tell us which group is most powerful. We can see that individual investors own the lion's share in the company with 51% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of individual investors took a hit after last week’s 4.9% price drop, institutions with their 43% holdings also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about AMG Critical Materials.

Check out our latest analysis for AMG Critical Materials

ownership-breakdown — ENXTAM:AMG Ownership Breakdown August 13th 2023

What Does The Institutional Ownership Tell Us About AMG Critical Materials?

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 AMG Critical Materials does have institutional investors; and they hold a good portion of the company's stock. 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. 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 AMG Critical Materials, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — ENXTAM:AMG Earnings and Revenue Growth August 13th 2023

AMG Critical Materials is not owned by hedge funds. Norges Bank Investment Management is currently the largest shareholder, with 3.8% of shares outstanding. For context, the second largest shareholder holds about 3.8% of the shares outstanding, followed by an ownership of 3.5% by the third-largest shareholder. Heinz Schimmelbusch, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

Our studies suggest that the top 25 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.

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 AMG Critical Materials

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We can report that insiders do own shares in AMG Critical Materials N.V.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around €63m worth of shares (at current prices). If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 51% of AMG Critical Materials shares. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand AMG Critical Materials better, we need to consider many other factors. Take risks for example - AMG Critical Materials has 3 warning signs we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.