Institutions' substantial holdings in Southern Cross Electrical Engineering implies that they have significant influence over the company's share price
A total of 5 investors have a majority stake in the company with 51% ownership
A look at the shareholders of Southern Cross Electrical Engineering Limited (ASX:SXE) can tell us which group is most powerful. We can see that institutions own the lion's share in the company with 41% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
Because institutional owners have a huge pool of resources and liquidity, their investing decisions tend to carry a great deal of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.
Let's take a closer look to see what the different types of shareholders can tell us about Southern Cross Electrical Engineering.
What Does The Institutional Ownership Tell Us About Southern Cross Electrical Engineering?
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.
As you can see, institutional investors have a fair amount of stake in Southern Cross Electrical Engineering. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Southern Cross Electrical Engineering's earnings history below. Of course, the future is what really matters.
ASX:SXE Earnings and Revenue Growth May 1st 2023
We note that hedge funds don't have a meaningful investment in Southern Cross Electrical Engineering. Gianfranco Tomasi is currently the largest shareholder, with 18% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.1% and 8.9%, of the shares outstanding, respectively. Additionally, the company's CEO Graeme Dunn directly holds 0.8% of the total shares outstanding.
To make our study more interesting, we found that the top 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
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. 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 Southern Cross Electrical Engineering
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.
It seems insiders own a significant proportion of Southern Cross Electrical Engineering Limited. It has a market capitalization of just AU$167m, and insiders have AU$38m worth of shares in their own names. 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 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Southern Cross Electrical Engineering. 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.
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. Case in point: We've spotted 1 warning sign for Southern Cross Electrical Engineering 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.
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