What kinds of shareholders own the majority of shares in the Mongolian mining company (HKG: 975)?
If you want to know who really controls Mongolia Mining Corporation (HKG: 975) then you will have to look at the makeup of its share register. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. I like to see at least a little insider ownership. As Charlie Munger said, “Show me the incentive and I’ll show you the result.
With a market cap of HK $ 1.9 billion, Mongolian Mining is a small cap stock, so it might be overlooked by many institutional investors. Looking at our data on ownership groups (below), it appears that institutions are not really present on the share register. Let’s dig deeper into each type of owner, to learn more about Mongolian mining.
See our latest analysis for Mongolian mining
What does the lack of institutional ownership tell us about Mongolian mining?
Small companies that are not very actively traded often lack institutional investors, but it is less common to see large companies without them.
There are many reasons why a company may not have institutions listed in the share register. It can be difficult for institutions to buy large amounts of stocks if liquidity (the number of stocks traded each day) is low. If the company did not need to raise capital, institutions might not have the opportunity to build up a position. On the other hand, there is always the possibility that professional investors will avoid a company because they think it is not the best place for their money. Mongolia Mining’s earnings and revenue (below) may not be convincing to institutional investors – or they may simply have not looked at the company closely.
We note that hedge funds do not have a significant investment in Mongolian mining. The main shareholder of the company is MCS Holding LLC, with a 31% stake. For context, the second largest shareholder owns around 7.3% of the outstanding shares, followed by 4.5% ownership by the third largest shareholder.
Our research also shed light on the fact that around 50% of the company is controlled by the top 5 shareholders, which suggests that these owners exercise significant influence over the company.
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 the expected performance of a stock. Our information suggests there is no analyst coverage of the stock, so it is likely little known.
Mongolian mining insider ownership
The definition of an insider may differ slightly from country to country, but board members still count. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board of directors.
Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
We can see that the insiders own shares in the Mongolian mining company. As individuals, insiders collectively own HK $ 133 million worth of the company HK $ 1.9 billion. It’s good to see some investments from insiders, but it can be worth checking out if those insiders have bought.
General public property
The general public has a 49% stake in Mongolia Mining. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.
Owned by a private company
Our data indicates that private companies own 43% of the company’s shares. It is difficult to draw conclusions from this fact alone, so it is worth considering who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.
I find it very interesting to see who exactly owns a company. But to really get an overview, we have to take other information into account as well. To this end, you should inquire about the 3 warning signs we spotted with Mongolia Mining (including 1 which does not suit us too much).
Sure this might not be the best stock to buy. So take a look at this free free list of interesting companies.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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