In This Article:
In this analysis, my focus will be on developing a perspective on Public Joint Stock Company GAZ’s (MISX:GAZA) latest ownership structure, a less discussed, but important factor. Ownership structure has been found to have an impact on shareholder returns in both short- and long-term. Differences in ownership structure of companies can have a profound effect on how management’s incentives are aligned with shareholder returns, which is why we’ll take a moment to analyse GAZA’s shareholder registry.
See our latest analysis for GAZ
Institutional Ownership
Institutions account for 20.76% of GAZA’s outstanding shares, a significant enough holding to move stock prices if they start buying and selling in large quantities, especially when there are relatively small amounts of shares available on the market to trade. These moves, at least in the short-term, are generally observed in an institutional ownership mix comprising of active stock pickers, in particular levered hedge funds, which can cause large price swings. In the case of GAZA, investors need not worry about such volatility considering active hedge funds don’t have a significant stake. However, we should dig deeper into GAZA’s ownership structure and find out how other key ownership classes can affect its investment profile.
General Public Ownership
A big stake of 18.49% in GAZA is held by the general public. This size of ownership gives retail investors collective power in deciding on major policy decisions such as executive compensation, appointment of directors and acquisitions of businesses. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and potential acquisitions. This is a positive sign for an investor who wants to be involved in key decision-making of the company.
Private Company Ownership
Potential investors in GAZA should also look at another important group of investors: private companies, with a stake of 68.82%, who are primarily invested because of strategic and capital gain interests. With this size of ownership in GAZA, this ownership class can affect the company’s business strategy. As a result, potential investors should further explore the company’s business relations with these companies and find out if they can affect shareholder returns in the long-term.
Next Steps:
GAZA’s considerably high level of institutional ownership calls for further analysis into its margin of safety. This will enable shareholders to comfortably invest in the company while avoid getting trapped in a sustained sell-off that is often observed in stocks with this level of institutional participation. However, if you are building an investment case for GAZA, ownership structure alone should not dictate your decision to buy or sell the stock. Instead, you should be evaluating company-specific factors such as the intrinsic valuation, which is a key driver of GAZ’s share price. I highly recommend you to complete your research by taking a look at the following: