To get a sense of who is truly in control of ArcelorMittal South Africa Ltd (JSE:ACL), it is important to understand the ownership structure of the business. We can see that public companies own the lion's share in the company with 69% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
Meanwhile, individual investors make up 16% of the company’s shareholders.
In the chart below, we zoom in on the different ownership groups of ArcelorMittal South Africa.
What Does The Lack Of Institutional Ownership Tell Us About ArcelorMittal South Africa?
Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. ArcelorMittal South Africa's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.
ArcelorMittal South Africa is not owned by hedge funds. ArcelorMittal S.A. is currently the company's largest shareholder with 69% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. The Industrial Development Corporation of South Africa Limited is the second largest shareholder owning 8.3% of common stock, and Noluthando Gosa holds about 6.2% of the company stock. Noluthando Gosa, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.
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 is some analyst coverage of the stock, but it could still become more well known, with time.
Insider Ownership Of ArcelorMittal South Africa
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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.
We can report that insiders do own shares in ArcelorMittal South Africa Ltd. As individuals, the insiders collectively own R316m worth of the R5.1b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.
General Public Ownership
The general public, who are usually individual investors, hold a 16% stake in ArcelorMittal South Africa. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Public Company Ownership
It appears to us that public companies own 69% of ArcelorMittal South Africa. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.
It's always worth thinking about the different groups who own shares in a company. But to understand ArcelorMittal South Africa better, we need to consider many other factors. Be aware that ArcelorMittal South Africa is showing 2 warning signs in our investment analysis , you should know about...
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
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