What Is The Ownership Structure Like For Sims Limited (ASX:SGM)?
One look at the shareholders of Sims Limited (ASX: SGM) can tell us which group is the most powerful. In general, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their holdings over time. We also tend to see lower insider exposure to companies that were previously publicly owned.
With a market cap of AU $ 1.6 billion, Sims is a decent size, so it's likely on institutional investor radar. Our analysis of ownership of the company below shows that institutional investors have participated in the company. Let's take a closer look at what the different types of shareholders can say about Sims.
Check out our latest analysis for Sims
Division of ownership
What does institutional ownership tell us about Sims?
Many institutions measure their performance against an index that approximates the local market. Therefore, they tend to pay more attention to companies included in major indices.
We can see that Sims has institutional investors; and they hold a good chunk of the company's stock. This implies that the analysts who work for these institutions have looked at the stock and like it. But just like everyone else, they could be wrong. It's not uncommon for a large stock price to fall when two large institutional investors are trying to sell a stock at the same time. So it's worth checking out Sims' earnings history so far (see below). Of course, remember that there are other factors to consider as well.
Profit and sales growth
Institutional investors own over 50% of the company, so together they are likely to have a large influence on the decisions of the board of directors. We find that hedge funds are not making a sensible investment in Sims. The company's largest shareholder is Orbis Investment Management Limited with an 18% stake. In this context, the second largest shareholder holds around 17% of the shares issued, followed by the third largest shareholder of 6.6%.
Our research has also shown that around 51% of the company is controlled by the top 5 shareholders, suggesting that those owners have a significant impact on the business.
While it makes sense to examine institutional ownership data for a company, it is also useful to examine analysts' views to determine which direction the wind is blowing. There are many analysts out there looking into the stock. So it might be worthwhile to see what they're predicting too.
Inside ownership of Sims
The definition of insider can be subjective and varies between jurisdictions. Our data reflects individual insiders and at least includes board members. Management ultimately replies to the board. However, it's not uncommon for managers to be board members, especially if they're founders or CEOs.
Inside ownership is positive when it signals that leadership thinks like the real owners of the company. However, high inside ownership can give immense power to even a small group within the company. This can be negative under certain circumstances.
Our data suggests that insiders own less than 1% of Sims Limited in their own name. It's a fairly large company, so it would be possible for directors to have a significant interest in the company without having a large proportional interest. In this case, they own shares valued at around AU $ 5.4 million (at current prices). Buying and selling in recent times is arguably just as important. You can click here to see if Insiders bought or sold.
General public property
The general public owns 29% of Sims. While this size of ownership is substantial, it may not be enough to change company policy if the decision is not synchronized with other major shareholders.
Public companies currently own 17% of Sims' stock. It's hard to say, but this suggests that they have intertwined business interests. This could be a strategic matter so it is worth investigating this area for changes in ownership.
I find it very interesting to see who exactly owns a company. But to really gain insight, we need to consider other information as well.
I like to delve deeper into a company's past performance. You can access this interactive chart of past earnings, earnings and cash flow for free.
If you're like me, you might want to think about whether this company is going to grow or shrink. Fortunately, you can check out this free report, which has analyst forecast for the future.
NB: The figures in this article are calculated using data from the last twelve months, which refers to the twelve month period ending on the last date of the month in which the financial statements are dated. This may not match the figures in the annual report for the full year.
This article from Simply Wall St is of a general nature. It is not a recommendation to buy or sell shares and does not take into account your goals or your financial situation. We want to provide you with a long-term, focused analysis based on fundamental data. Note that our analysis may not take into account the latest price sensitive company announcements or quality materials. Simply Wall St has no position in the stocks mentioned.
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