While private companies own 25% of Stadio Holdings Limited (JSE:SDO), individual investors are its largest shareholders with 28% ownership
Simply Wall St
5 min read
Key Insights
The considerable ownership by individual investors in Stadio Holdings indicates that they collectively have a greater say in management and business strategy
53% of the business is held by the top 3 shareholders
To get a sense of who is truly in control of Stadio Holdings Limited (JSE:SDO), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 28% to be precise, is individual investors. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And private companies on the other hand have a 25% ownership in the company.
Let's take a closer look to see what the different types of shareholders can tell us about Stadio Holdings.
What Does The Institutional Ownership Tell Us About Stadio Holdings?
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.
We can see that Stadio Holdings does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Stadio Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.
JSE:SDO Earnings and Revenue Growth April 28th 2023
We note that hedge funds don't have a meaningful investment in Stadio Holdings. PSG Group Ltd is currently the largest shareholder, with 20% of shares outstanding. PSG Alpha is the second largest shareholder owning 17% of common stock, and Coronation Fund Managers Limited holds about 16% of the company stock. Additionally, the company's CEO Christian Phillipus Vorster directly holds 1.8% of the total shares outstanding.
To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Stadio Holdings
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.
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.
We can see that insiders own shares in Stadio Holdings Limited. In their own names, insiders own R136m worth of stock in the R3.8b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.
General Public Ownership
With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Stadio Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Equity Ownership
Private equity firms hold a 17% stake in Stadio Holdings. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.
Private Company Ownership
We can see that Private Companies own 25%, of the shares on issue. 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 5.1% of Stadio Holdings. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
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 Stadio Holdings that you should be aware of before investing here.
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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