Oceana Group Limited (JSE:OCE) is definitely on the radar of institutional investors who own 40% of the company

editorial-team@simplywallst.com (Simply Wall St)

Thu, Jan 11, 2024, 11:28 PM 4 min read

Key Insights

Given the large stake in the stock by institutions, Oceana Group's stock price might be vulnerable to their trading decisions
The top 3 shareholders own 53% of the company
Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

Every investor in Oceana Group Limited (JSE:OCE) should be aware of the most powerful shareholder groups. With 40% stake, institutions possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Since institutional have access to huge amounts of capital, their market moves tend to receive a lot of scrutiny by retail or individual investors. Therefore, a good portion of institutional money invested in the company is usually a huge vote of confidence on its future.

In the chart below, we zoom in on the different ownership groups of Oceana Group.

Check out our latest analysis for Oceana Group

ownership-breakdown — JSE:OCE Ownership Breakdown January 12th 2024

What Does The Institutional Ownership Tell Us About Oceana Group?

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.

Oceana Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Oceana Group, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth — JSE:OCE Earnings and Revenue Growth January 12th 2024

We note that hedge funds don't have a meaningful investment in Oceana Group. Our data shows that Brimstone Investment Corporation Limited is the largest shareholder with 27% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 14% and 12%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Oceana Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 data suggests that insiders own under 1% of Oceana Group Limited in their own names. It has a market capitalization of just R8.5b, and the board has only R1.4m worth of shares in their own names. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, who are usually individual investors, hold a 19% stake in Oceana 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.

Public Company Ownership

It appears to us that public companies own 27% of Oceana Group. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Oceana Group .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.