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A look at the shareholders of Macmahon Holdings Limited (ASX:MAH) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
Individual investors, on the other hand, account for 37% of the company's stockholders.
In the chart below, we zoom in on the different ownership groups of Macmahon Holdings.
Check out our latest analysis for Macmahon Holdings
What Does The Institutional Ownership Tell Us About Macmahon Holdings?
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.
As you can see, institutional investors have a fair amount of stake in Macmahon Holdings. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Macmahon Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.
Macmahon Holdings is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Amman Mineral Contractors (Singapore) Pte. Ltd. with 45% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 7.2% and 2.6%, of the shares outstanding, respectively.
To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Macmahon Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.