To get a sense of who is truly in control of Vulcan Steel Limited (ASX:VSL), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 34% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
So it follows, every decision made by insiders of Vulcan Steel regarding the company's future would be crucial to them.
In the chart below, we zoom in on the different ownership groups of Vulcan Steel.
What Does The Institutional Ownership Tell Us About Vulcan Steel?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
We can see that Vulcan Steel 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. 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 Vulcan Steel's earnings history below. Of course, the future is what really matters.
ASX:VSL Earnings and Revenue Growth August 25th 2024
We note that hedge funds don't have a meaningful investment in Vulcan Steel. Peter Wells is currently the largest shareholder, with 14% of shares outstanding. Forsyth Barr Investment Management Limited is the second largest shareholder owning 6.0% of common stock, and Aoraki Partnership Trust holds about 5.6% of the company stock. Additionally, the company's CEO Rhys Jones directly holds 1.8% of the total shares outstanding.
We did some more digging and found that 9 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.
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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of Vulcan Steel
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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 Vulcan Steel Limited. Insiders have a AU$328m stake in this AU$950m business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.
General Public Ownership
With a 20% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Vulcan Steel. 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 22%, of the Vulcan Steel stock. 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.
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. To that end, you should be aware of the 3 warning signs we've spotted with Vulcan Steel .
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.
