OreCorp Limited (ASX:ORR) Share Price Falls 10% Last Week; individual investors would not be happy

A look at the shareholders of OreCorp Limited (ASX:ORR) can tell us which group is the most powerful. The group holding the largest number of shares in the company, around 44% to be precise, are individual investors. In other words, the group faces the maximum upside potential (or downside risk).

And last week, individual investors suffered the biggest losses as the stock fell 10%.

Let’s dive deeper into each type of owner in OreCorp, starting with the table below.

See our latest analysis for OreCorp

ASX: ORR Ownership Breakdown June 28, 2022

What does institutional ownership tell us about OreCorp?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

OreCorp already has institutions on the stock register. Indeed, they hold a respectable stake in the company. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see OreCorp’s historic earnings and revenue below, but keep in mind there’s always more to tell.

earnings-and-revenue-growth
ASX: ORR Earnings and Revenue Growth June 28, 2022

We note that hedge funds have no significant investment in OreCorp. The company’s largest shareholder is Federation Mining Pty Ltd with a 12% stake. In comparison, the second and third shareholders hold approximately 11% and 9.0% of the shares. Additionally, CEO Matthew Yates owns 2.7% of the company’s stock.

Upon closer inspection, we found that more than half of the company’s shares are held by the top 10 shareholders, suggesting that the interests of larger shareholders are to some extent balanced by those of smaller ones.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. There is some analyst coverage of the stock, but it could still become better known over time.

OreCorp Insider Ownership

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

We may report that insiders hold shares in OreCorp Limited. It has a market capitalization of just A$160 million and insiders hold A$13 million worth of shares, in their own name. It’s good to see insider investing, but we generally like to see higher insider holdings. It might be worth checking to see if these insiders have bought.

General public property

The general public, including retail investors, owns 44% of the company’s shares and therefore cannot be easily ignored. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Private Company Ownership

It appears that private companies own 29% of OreCorp’s shares. Private companies can be related parties. Sometimes insiders have an interest in a public company through a stake in a private company, rather than in their own capacity as individuals. Although it is difficult to draw general conclusions, it should be noted that this is an area for further research.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand OreCorp, we need to consider many other factors. Be aware that OreCorp displays 4 warning signs in our investment analysis and 1 of them is significant…

But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter future.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Karen J. Nelson