Institutional investors are Hosken Consolidated Investments Limited's (JSE:HCI) biggest bettors and were rewarded after last week's R1.8b market cap gain
editorial-team@simplywallst.com (Simply Wall St)
4 min read
Key Insights
Significantly high institutional ownership implies Hosken Consolidated Investments' stock price is sensitive to their trading actions
A look at the shareholders of Hosken Consolidated Investments Limited (JSE:HCI) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 45% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
And last week, institutional investors ended up benefitting the most after the company hit R17b in market cap. The one-year return on investment is currently 16% and last week's gain would have been more than welcomed.
In the chart below, we zoom in on the different ownership groups of Hosken Consolidated Investments.
What Does The Institutional Ownership Tell Us About Hosken Consolidated 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.
As you can see, institutional investors have a fair amount of stake in Hosken Consolidated Investments. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Hosken Consolidated Investments' earnings history below. Of course, the future is what really matters.
JSE:HCI Earnings and Revenue Growth November 6th 2023
Hosken Consolidated Investments is not owned by hedge funds. Southern African Clothing and Textile Workers Union, Endowment Arm is currently the largest shareholder, with 26% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 13% and 11%, of the shares outstanding, respectively. John Copelyn, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.
Our research also brought to light the fact that roughly 55% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.
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 Hosken Consolidated Investments
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
Our most recent data indicates that insiders own a reasonable proportion of Hosken Consolidated Investments Limited. It has a market capitalization of just R17b, and insiders have R2.4b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
With a 41% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hosken Consolidated Investments. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Next Steps:
It's always worth thinking about the different groups who own shares in a company. But to understand Hosken Consolidated Investments better, we need to consider many other factors. For instance, we've identified 2 warning signs for Hosken Consolidated Investments that 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.
