Private companies are Nickel Industries Limited's (ASX:NIC) biggest owners and were hit after market cap dropped AU$178m
Simply Wall St
4 min read
If you want to know who really controls Nickel Industries Limited (ASX:NIC), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 39% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As market cap fell to AU$2.2b last week, private companies would have faced the highest losses than any other shareholder groups of the company.
Let's delve deeper into each type of owner of Nickel Industries, beginning with the chart below.
What Does The Institutional Ownership Tell Us About Nickel Industries?
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 Nickel Industries. 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. 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 Nickel Industries, (below). Of course, keep in mind that there are other factors to consider, too.
ASX:NIC Earnings and Revenue Growth September 25th 2022
We note that hedge funds don't have a meaningful investment in Nickel Industries. The company's largest shareholder is Tsingshan Holding Group Co., Ltd., with ownership of 21%. With 13% and 6.3% of the shares outstanding respectively, PT Karunia Bara Perkasa and BlackRock, Inc. are the second and third largest shareholders. Additionally, the company's CEO Justin Werner directly holds 1.1% 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of Nickel Industries
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.
Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
We can see that insiders own shares in Nickel Industries Limited. This is a big company, so it is good to see this level of alignment. Insiders own AU$188m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.
General Public Ownership
The general public, who are usually individual investors, hold a 27% stake in Nickel Industries. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
Our data indicates that Private Companies hold 39%, of the company's shares. 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:
It's always worth thinking about the different groups who own shares in a company. But to understand Nickel Industries better, we need to consider many other factors. For instance, we've identified 2 warning signs for Nickel Industries that you should be aware of.
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.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
