Kelsian Group Limited's (ASX:KLS) stock price dropped 5.3% last week; retail investors would not be happy
Simply Wall St
4 min read
Key Insights
The considerable ownership by retail investors in Kelsian Group indicates that they collectively have a greater say in management and business strategy
52% of the business is held by the top 14 shareholders
To get a sense of who is truly in control of Kelsian Group Limited (ASX:KLS), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 36% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
As a result, retail investors as a group endured the highest losses last week after market cap fell by AU$86m.
In the chart below, we zoom in on the different ownership groups of Kelsian Group.
What Does The Institutional Ownership Tell Us About Kelsian Group?
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 Kelsian Group. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Kelsian Group, (below). Of course, keep in mind that there are other factors to consider, too.
ASX:KLS Earnings and Revenue Growth September 23rd 2023
We note that hedge funds don't have a meaningful investment in Kelsian Group. The company's largest shareholder is Neil Smith, with ownership of 9.6%. For context, the second largest shareholder holds about 6.8% of the shares outstanding, followed by an ownership of 5.1% by the third-largest shareholder. Furthermore, CEO Clinton Feuerherdt is the owner of 2.3% of the company's shares.
Looking at the shareholder registry, we can see that 52% of the ownership is controlled by the top 14 shareholders, meaning that no single shareholder has a majority interest in the ownership.
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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of Kelsian Group
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.
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.
Our information suggests that insiders maintain a significant holding in Kelsian Group Limited. Insiders have a AU$330m stake in this AU$1.5b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 36% stake in Kelsian Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Private Company Ownership
It seems that Private Companies own 25%, of the Kelsian Group stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
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.
