African Rainbow Capital Investments Limited's (JSE:AIL) largest shareholders are private companies with 55% ownership, individual investors own 24%
editorial-team@simplywallst.com (Simply Wall St)
4 min read
Key Insights
African Rainbow Capital Investments' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
The largest shareholder of the company is Ubuntu-Botho Investments Pty Ltd. with a 53% stake
Every investor in African Rainbow Capital Investments Limited (JSE:AIL) should be aware of the most powerful shareholder groups. We can see that private companies own the lion's share in the company with 55% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And individual investors on the other hand have a 24% ownership in the company.
Let's delve deeper into each type of owner of African Rainbow Capital Investments, beginning with the chart below.
What Does The Institutional Ownership Tell Us About African Rainbow Capital Investments?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
Institutions have a very small stake in African Rainbow Capital Investments. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.
JSE:AIL Earnings and Revenue Growth November 11th 2023
African Rainbow Capital Investments is not owned by hedge funds. Ubuntu-Botho Investments Pty Ltd. is currently the company's largest shareholder with 53% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 5.5% by the third-largest shareholder.
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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of African Rainbow Capital Investments
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. 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 report that insiders do own shares in African Rainbow Capital Investments Limited. As individuals, the insiders collectively own R367m worth of the R6.7b 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
The general public, who are usually individual investors, hold a 24% stake in African Rainbow Capital Investments. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Company Ownership
Our data indicates that Private Companies hold 55%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - African Rainbow Capital Investments has 1 warning sign we think you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this freelist of interesting companies.
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.
