Chesapeake Gold Corp. (CVE:CKG) fell 11% last week; individual investors would not be happy

A look at the shareholders of Chesapeake Gold Corp. (CVE:CKG) can tell us which group is more powerful. With a 53% stake, individual investors hold the most shares in the company. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.

While insiders, who own 35% of the shares, were not spared by the C$18 million drop in market capitalization last week, individual investors as a group suffered the maximum losses.

Let’s dig deeper into each type of Chesapeake Gold owner, starting with the chart below.

However, if you prefer to see where opportunities and risks are within CKG’s industryyou can check out our CA Metals and Mining industry analysis.

TSXV:CKG Shareholding breakdown September 20, 2022

What does institutional ownership tell us about Chesapeake Gold?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

Less than 5% of Chesapeake Gold is owned by institutional investors. This suggests that some funds have the company in their sights, but many have yet to buy shares. So if the business itself can improve over time, we may well see more institutional buyers in the future. When several institutional investors wish to buy shares, we often see a rise in the price of the share. Past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

earnings-and-revenue-growth
TSXV:CKG Earnings and Revenue Growth September 20, 2022

It appears that hedge funds own 7.1% of Chesapeake Gold shares. This is interesting because hedge funds can be very active and militant. Many are looking for medium-term catalysts that will drive the stock price higher. Eric Sprott is currently the company’s largest shareholder with 13% of the shares outstanding. Alan Pangbourne is the second largest shareholder with 11% of common stock and Sun Valley Gold LLC owns approximately 7.1% of the company’s stock. Alan Pangbourne, who is the second largest shareholder, also holds the title of managing director.

Looking at our ownership data, we found that 18 of the major shareholders collectively own less than 50% of the share register, implying that no single individual holds a majority stake.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. Our information suggests there is no analyst coverage of the stock, so it is likely little known.

Chesapeake Gold Insider Ownership

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Our information suggests that insiders have a large stake in Chesapeake Gold Corp. Insiders own C$51 million worth of shares in the C$144 million company. This may suggest that the founders still own a lot of shares. You can click here to see if they bought or sold.

General public property

The general public, who are usually retail investors, hold a substantial 53% stake in Chesapeake Gold, which suggests it is quite a popular stock. This level of ownership gives mainstream investors some power to influence key policy decisions such as board composition, executive compensation, and dividend payout ratio.

Private Company Ownership

Our data indicates that private companies hold 3.9% of the company’s shares. It’s hard to draw conclusions from this fact alone, so it’s worth investigating 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.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Chesapeake Gold, we need to consider many other factors. To this end, you should be aware of the 2 warning signs we spotted with Chesapeake Gold.

Sure this may 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 using trailing twelve month data, which refers to the 12 month period ending on the last day of the month 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.

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Karen J. Nelson