Yahoo Finance Painful week for individual investors invested in Standard Bank Group Limited (JSE:SBK) after 3.8% drop, institutions also suffered losses
Key Insights
Significant control over Standard Bank Group by individual investors implies that the general public has more power to influence management and governance-related decisions
A total of 10 investors have a majority stake in the company with 50% ownership
To get a sense of who is truly in control of Standard Bank Group Limited (JSE:SBK), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 38% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While the holdings of individual investors took a hit after last week’s 3.8% price drop, institutions with their 27% holdings also suffered.
Let's take a closer look to see what the different types of shareholders can tell us about Standard Bank Group.
Check out our latest analysis for Standard Bank Group
What Does The Institutional Ownership Tell Us About Standard Bank Group?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in Standard Bank Group. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Standard Bank Group, (below). Of course, keep in mind that there are other factors to consider, too.
Standard Bank Group is not owned by hedge funds. Our data shows that Industrial and Commercial Bank of China Limited is the largest shareholder with 20% of shares outstanding. Public Investment Corporation Limited is the second largest shareholder owning 15% of common stock, and Coronation Fund Managers Limited holds about 5.1% of the company stock.
We did some more digging and found that 10 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Standard Bank Group
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our data suggests that insiders own under 1% of Standard Bank Group Limited in their own names. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own R299m worth of shares (at current prices). In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 38% stake in Standard Bank Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
We can see that public companies hold 20% of the Standard Bank Group shares on issue. 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.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Standard Bank Group that you should be aware of before investing here.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.
