Yahoo Finance McMillan Shakespeare Limited (ASX:MMS) most popular amongst individual investors who own 44% of the shares, institutions hold 34%
Key Insights
Significant control over McMillan Shakespeare by individual investors implies that the general public has more power to influence management and governance-related decisions
A total of 14 investors have a majority stake in the company with 50% ownership
To get a sense of who is truly in control of McMillan Shakespeare Limited (ASX:MMS), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 44% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 34% of the company's stockholders. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies.
Let's delve deeper into each type of owner of McMillan Shakespeare, beginning with the chart below.
See our latest analysis for McMillan Shakespeare
What Does The Institutional Ownership Tell Us About McMillan Shakespeare?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that McMillan Shakespeare does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see McMillan Shakespeare's historic earnings and revenue below, but keep in mind there's always more to the story.
McMillan Shakespeare is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Chessari Holdings Proprietary Limited with 8.7% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 5.7% and 5.5%, of the shares outstanding, respectively.
After doing some more digging, we found that the top 14 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of McMillan Shakespeare
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Shareholders would probably be interested to learn that insiders own shares in McMillan Shakespeare Limited. In their own names, insiders own AU$80m worth of stock in the AU$1.3b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 44% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Company Ownership
Our data indicates that Private Companies hold 9.8%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Public Company Ownership
It appears to us that public companies own 5.7% of McMillan Shakespeare. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - McMillan Shakespeare has 3 warning signs we think you should be aware of.
But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.
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.
